Posted: Thursday, 4 December 2025 @ 12:55
As the year draws to a close and festive lights begin to twinkle, our thoughts naturally turn to family, gratitude, and generosity. Amid the holiday preparations, there's one profoundly caring gift that often goes overlooked: getting your affairs in order.
The end of the year isn't just a calendar change—it's a strategic deadline for tax planning and a perfect moment to ensure your family's future is protected. Think of it as laying the groundwork for peace of mind, so you can step into the new year with confidence and clarity.
The Ultimate Festive Gift
This holiday season, give your loved ones something that lasts beyond the festivities: certainty, protection, and peace of mind. A well-considered Will and a smart tax plan are the most caring preparations you can make.
Year-End Tax Planning: Use It or Lose It
Several valuable tax allowances reset on April 5th. Taking action before the new year can save your family significant amounts. Here are key areas to consider:
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1. Use Your Annual Gift Allowances
You can give away £3,000 each tax year (your 'annual exemption') free of Inheritance Tax (IHT). This can be doubled to £6,000 if you didn't use last year's allowance. Smaller gifts of up to £250 per person are also exempt.
Action Point: Consider making these gifts before the year ends to start the 7-year IHT clock ticking.
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2. Review "Normal Expenditure Out of Income"
Regular gifts made from your surplus income (not capital) are immediately IHT-free. This could include helping with grandchildren's school fees or regular cash gifts to family.
Action Point: Ensure you have a clear record of this pattern of giving.
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3. Maximise Pension Contributions
Contributions to your pension are generally exempt from IHT. Your annual allowance is currently £60,000 (or 100% of earnings, if lower).
Action Point: Consider topping up your pension before April to reduce your taxable estate.
⚠️ Deadline Alert: April 5th, 2026
Many of these allowances cannot be carried forward. Once the tax year ends, they're gone forever. Planning now ensures you don't miss valuable opportunities to protect your wealth.
The Festive Will: Your Family's Security Blanket
While tax planning is about preserving wealth, having a valid Will is about directing it with love and intention. The holidays are an ideal time to create or review this essential document.
🎄 Why a Will Makes Sense This Season:
You're likely thinking more about family and loved ones
It's a quiet time for reflection and planning
You can start the new year with everything in order
It's a lasting gift that provides genuine security
Common Festive Season Scenarios:
Blended Families: Ensure children from previous relationships are provided for.
New Grandchildren: Include them in your Will or set up trusts for their future.
Charitable Giving: Remember favourite charities in your Will.
Digital Assets: Include instructions for social media accounts and digital photos.
Your Year-End Estate Planning Checklist
- ✅ Do you have a valid, up-to-date Will?
- ✅ Have you considered using your annual IHT gift allowances?
- ✅ Are your pension contributions optimised?
- ✅ Have you reviewed your Life Insurance policies and beneficiaries?
- ✅ Are your Powers of Attorney in place?
- ✅ Have you made a list of your digital assets and passwords?
- ✅ Have you spoken to your family about your wishes?
A Peaceful Start to the New Year
Completing your year-end planning is like tidying the house before guests arrive—it creates space for enjoyment and removes underlying stress. Knowing your affairs are in order allows you to focus on what truly matters during the festive season: connection, celebration, and creating happy memories.
"The best gift you can give your family isn't wrapped in paper—it's the gift of certainty, protection, and a well-planned future."
Take Action This Season: A member of The Institute of Professional Willwriters can guide you through both your year-end tax planning and Will preparation, ensuring everything is correctly structured for maximum benefit and peace of mind.
Professional Advice Recommended: This guide provides general information. Tax and estate planning should be tailored to your individual circumstances. Consult with a qualified professional for personalised advice to ensure your plans are effective and compliant.