UK Tax Year End Checklist for Expats

7th January 2026

UK tax year-end checklist 2025/26 for expats and high-net-worth individuals

Navigating UK tax as an expat or a high-net-worth individual is more complex than it used to be. The 2025/26 tax year brought a major overhaul, with the end of domicile-based taxation, ongoing “stealth” tax rises from frozen thresholds, and more reform on the horizon. This year-end checklist sets out practical steps to support tax planning, reduce exposure where possible, and stay compliant.

Review of the 2025/26 tax year

The 2025/26 tax year began with the abolition of domicile status as the basis for personal tax liability, one of the biggest UK tax reforms in generations.

Income tax rates did not change, but thresholds and allowances have remained frozen during a period of high inflation. This creates fiscal drag, where more of someone’s income is taxed, even if their earnings have not increased in real terms. As of November 2025, the Chancellor confirmed the freeze will continue until at least 2031.

The practical impact is a higher effective tax rate for many taxpayers. At the same time, investment income tax rates are set to rise over the next two tax years.

1. Maximise tax-free allowances

These allowances are typically “use it or lose it”. If you do not use them within the tax year, you usually cannot carry them forward.

Personal allowances

• Personal Allowance: £12,570 (phased out from £100,000 income)
• Marriage Allowance: £1,260 (can save couples up to £252)
• Blind Person’s Allowance: £3,130 (added to the Personal Allowance)

Investment and savings allowances

• Personal Savings Allowance: £1,000 (basic rate), £500 (higher rate), £0 (additional rate)
• Dividend Allowance: £500
• Capital Gains Tax allowance: £3,000

Property and trading allowances

• Trading Allowance: £1,000
• Property Allowance: £1,000
• Rent-a-Room Relief: £7,500

Inheritance Tax allowances and gift exemptions

• Annual exemption: £3,000 (or £6,000 per couple, with carry-over)
• Small gifts: up to £250 per person (if not also using the annual exemption)
• Wedding gifts: up to £5,000 (child), £2,500 (grandchild), £1,000 (others)

2. Use your ISA allowance (still £20,000)

ISAs remain a core planning tool because growth and income within the wrapper are tax-free in the UK.

Common ISA types

• Cash ISAs
• Stocks and Shares ISAs
• Lifetime ISAs (LISA): up to £4,000, with a 25% government bonus
• Innovative Finance ISAs (IFISA)
• Junior ISAs (JISA): £9,000 annual limit

Key ISA changes in 2025/26

• You can contribute to multiple ISAs of the same type.
• Partial transfers are now allowed.
• Your ISA allowance resets on 6 April.

3. Temporary Repatriation Facility for former non-doms

From 2025 to 2028, former non-doms can bring historic untaxed income into the UK at a flat 12% to 15% rate.

Key rules

• You must have used the remittance basis pre-April 2025.
• After tax, the funds become “clean capital”.
• You can designate funds without remitting them immediately.
• No foreign tax credits are allowed.

4. National Insurance alert for expats

From 6 April 2026, National Insurance rules change for expats:

• Class 2 NICs are abolished.
• Expats must pay Class 3 NICs (around £923 a year) instead of Class 2 (around £182 a year).
• A new 10-year UK residency rule applies to qualify for voluntary contributions.

Action steps

• Check your National Insurance record on GOV.UK.
• Consider applying using the CF83 form to lock in the Class 2 rate before April 2026.

5. Cut your 2025/26 or 2024/25 tax bill

Some venture capital schemes can offer tax reliefs, but they are higher risk and come with strict rules.

Tax-advantaged venture capital investments

• EIS, SEIS and VCT schemes can offer income tax relief (up to 50%), capital gains tax exemption or deferral, and loss relief (where available).
• Relief can be claimable for the previous tax year under carry-back rules.

SEIS vs EIS vs VCT (summary)

• SEIS: 50% income tax relief, CGT exemption, plus exemption of other chargeable gains, loss relief, and no tax-free dividends
• EIS: 30% income tax relief, CGT exemption plus tax deferral, loss relief, no tax-free dividends
• VCT: 30% income tax relief (20% from April ’26), tax-free dividends, CGT exemption, no loss relief

6. Make pension contributions

Pension contributions can reduce taxable income and help reclaim tax relief.

• Annual limit: £60,000 or 100% of earnings
• Carry forward: unused allowance from the previous three tax years can be used
• High earners: tapering starts at £260,000

Pension planning can also help manage exposure to common cliff edges, including:

• loss of the Personal Allowance above £100,000
• the High Income Child Benefit Charge above £60,000
• moving into higher tax bands

7. Consider Gift Aid donations

Gift Aid adds 25% to eligible donations and can reduce your tax bill.

• Example: for a 40% taxpayer, a £100 donation can have an effective net cost of £75.

Gift Aid can also support planning goals such as:

• regaining some or all of the Personal Allowance
• reducing exposure to the Child Benefit charge
• keeping taxable income within a lower tax band where possible

8. What is changing in 2026?

Making Tax Digital (MTD for ITSA)

• Mandatory quarterly digital reporting for incomes over £50,000.
• UK non-residents get a one-year extension, starting April 2027.

Capital gains and dividend tax changes

• Dividend tax is set to rise.
• Further investment income tax changes are ex

This is wealth. Built with Wisdom.

If you’d like to discuss UK tax, wealth management, or succession planning, our advisers are here to help

Please note this is a general guide and is not advice that can be relied on. It is important that you seek specific advice for your own circumstances. 

This material is intended for both Professional and Retail Clients, as defined by the Dubai Financial Services Authority. Metis Financial Planning Limited is regulated by the Dubai Financial Services Authority.