17 Feb UK Tax Year End 2025/26: What You Should Be Reviewing Now

Posted at 16:48h in Business, Companies, Individuals, Tax Residence by

As we approach the end of the 2025/26 UK tax year (5 April 2026), this is the right time for individuals and business owners to review their tax position and plan ahead.

Several important tax changes have already taken effect from April 2025, with further increases and restrictions coming from April 2026 and beyond.

Key Changes Already in Force (From April 2025)

Furnished Holiday Lettings (FHL) – Regime Abolished

From 6 April 2025, the special tax treatment for Furnished Holiday Lettings no longer applies.

FHL properties are now treated as standard rental properties.

What this means:

  • No more full relief on mortgage interest.
  • No access to capital allowances under FHL rules.
  • Certain Capital Gains Tax (CGT) and Inheritance Tax (IHT) advantages no longer apply.
  • Carried-forward FHL losses now become general property losses.

If you stopped operating an FHL before April 2025, you may still qualify for Business Asset Disposal Relief (BADR) if the property is sold within three years.

Property ownership between spouses or civil partners may also require review to ensure income is taxed efficiently.

New Residence-Based Tax System (Non-Dom Rules Abolished)

The previous remittance basis regime has now been abolished.

From April 2025, the UK operates a residence-based tax system.

Under the new rules:

  • Individuals who become UK tax resident after 10 consecutive years of non-UK residence may qualify for 100% relief on foreign income and gains for their first four UK tax years.
  • After the four-year period, worldwide income and gains are taxed as they arise.
  • Trust structures and inheritance tax exposure may be affected.

Internationally mobile individuals should review their residency position and asset structures carefully.

Business Asset Disposal Relief (BADR) – Higher CGT Rates

The reduced CGT rate for qualifying business disposals has increased:

  • 14% from April 2025
  • 18% from 6 April 2026

If you are planning to sell shares or business assets, timing has become more important than ever.

National Insurance and State Pension Gaps

To receive a full UK State Pension, you usually need 35 qualifying years of National Insurance Contributions (NICs).

You can:

  • Make voluntary contributions for up to six previous tax years.
  • Fill gaps before 5 April each year.
  • Top up 2024/25 contributions until 5 April 2031.

Reviewing your NI record early can prevent reduced pension entitlement later.

Now is the time to:

  • Review dividend strategy.
  • Consider timing of business disposals.
  • Check National Insurance contribution gaps.
  • Reassess property structures.
  • Review inheritance and succession planning.
  • Prepare for Making Tax Digital obligations.

Early planning provides flexibility. Last-minute decisions often limit options.

How We Can Support You

As tax legislation becomes more complex, proactive planning makes a measurable difference.

We assist individuals and businesses with:

  • Year-end tax reviews
  • Capital gains planning
  • Property tax structuring
  • Inheritance and succession strategies
  • Transition to the new residence-based regime
  • Preparation for Making Tax Digital
  • Dividend and remuneration planning

If you would like a tailored review before the tax year ends, our team is ready to guide you through the changes with clarity and practical advice.

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