5 ways a financial planner could help you mitigate a large tax bill in 2025

When creating your financial plan, it’s important to consider the tax you might pay. If you’re paying more than you need to, this could affect the amount of wealth you have to cover your living expenses and contribute to savings for the future.

Managing your liability is especially important right now because the government has recently increased certain taxes and changed thresholds. There is also a chance they could raise taxes again in the near future.

Fortunately, there are several ways we could help you hold and grow your wealth more tax-efficiently.

Here are five ways a financial planner could help you mitigate a large tax bill in 2025.

1. Using your ISA allowances

Using all your available allowances is one of the most effective ways to mitigate a large tax bill.

For example, saving and investing in ISAs may benefit you as you don’t pay Income Tax or Dividend Tax on any growth you achieve. You won’t pay Capital Gains Tax (CGT) when selling investments in an ISA either, and there is no tax when withdrawing funds from this tax wrapper.

As of 2025/26, you can contribute up to £20,000 to your ISAs and this allowance resets at the start of the new tax year. It’s also an individual allowance, so you and a partner could contribute up to £40,000 between you each year.

We can help you check that you’re using as much of your available ISA allowances as possible before saving and investing elsewhere.

2. Reviewing your pension contributions

Your pension is another tax-efficient savings vehicle you may want to take advantage of.

When you pay into your pension, you automatically receive 20% tax relief on your contributions. You might also be able to claim another 20% or 25% through self-assessment if you’re a higher- or additional-rate taxpayer.

However, in 2025/26, you only benefit from tax relief on contributions up to £60,000 (or 100% of your earnings, whichever is lower). This is your “Annual Allowance”.

Fortunately, you may be able to carry over any unused Annual Allowance from the past three tax years, provided you have used your full allowance for the current year.

We will work with you to review your pension contributions to make sure you’re using your Annual Allowance effectively. Increasing your pension contributions could potentially reduce the Income Tax you pay and help you build more wealth for the future.

3. Planning the sale of assets

You may need to pay CGT on your profits when selling or disposing of certain assets. However, with our help, there are ways to potentially reduce your bill.

You could pay CGT when selling or transferring ownership of:

Stocks and shares outside an ISA
A property that isn’t your main home
Certain business assets
Personal possessions worth more than £6,000 (excluding your car).

In 2025/26, you have a CGT “annual exempt amount” of £3,000. Any profits that exceed this amount will be taxed at:

18% if you’re a basic-rate taxpayer
24% if you’re a higher- or additional-rate taxpayer.

Crucially, your annual exempt amount resets at the start of a new tax year on 6 April. Your partner also has their own annual exempt amount. Additionally, you can pass assets to a spouse or civil partner without CGT.

This means we can help you plan the sale of assets to make the most effective use of your allowances. For example, you could split the sale across several tax years or pass assets to a spouse or civil partner to sell, so you benefit from both annual exempt amounts.

4. Creating an estate plan

As well as considering the tax you might pay while alive, you may also need to consider the Inheritance Tax (IHT) your family could pay on your estate when you’re gone.

In 2025/26, you can pass on up to £325,000 without triggering an IHT charge. This is your “nil-rate band”. You might also have up to an extra £175,000 “residence nil-rate band” you can use when passing your main home to a direct descendant such as a child or grandchild.

Additionally, your spouse or civil partner can inherit your entire estate without IHT, and benefit from any of your unused nil-rate bands.

This means that, as a couple, you could pass on up to £1 million between you before IHT is due.

However, as house prices rise and you potentially build wealth in your savings and investments, you could exceed the nil-rate bands. As a result, your loved ones may lose a portion of their inheritance to tax.

You could mitigate IHT by creating an estate plan and considering ways to transfer wealth while alive. For instance, gifting wealth to your loved ones now may reduce the size of your estate for IHT purposes.

Alternatively, if you gift at least 10% of your entire estate to charity, your family may pay IHT at a reduced rate.

That said, the gifting tax rules can be complicated, and any mistakes could end up costing your family. We can help you understand what the IHT liability of your estate might be, and the most tax-efficient ways to pass wealth to the next generation.

5. Navigating changes to tax legislation

Adapting to any changes in legislation is important if you want your financial plan to continue working as intended.

In some cases, if the tax treatment of certain assets changes, you may need to reconsider how you hold your wealth or revisit your estate plan. You might also feel apprehensive about whether you will lose more of your wealth to tax, especially if you don’t fully understand the changes.

We can support you here by explaining any new legislation and how it will affect you specifically. More importantly, we can take steps including those outlined above to ensure you are still able to meet your financial goals, despite any tax changes.

Get in touch

Please contact us at hello@ardentuk.com or call or WhatsApp us on 01904 655 330. As an award-winning financial advice company with advisers included in the 2025 VouchedFor Top Rated guide, you can be sure that we’re a bona fide company providing excellent advice and high-quality service.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

All information is correct at the time of writing and is subject to change in the future.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.