Use-It-or-Lose-It Tax Allowances Checklist for 2026/27
The UK tax and savings allowances that reset every 5 April and can't be carried forward — ISA, dividend, CGT, gift and pension allowances — with a practical pre-deadline checklist.
The allowances that don't carry forward
| Allowance | 2026/27 amount | Carries forward? |
|---|---|---|
| ISA allowance | £20,000 | No |
| Dividend allowance | £500 | No |
| CGT annual exempt amount | £3,000 | No |
| IHT annual gift exemption | £3,000 | One year only (max £6,000) |
| Pension annual allowance | £60,000 | Yes, up to 3 years |
ISA Calculator
Project ISA savings growth over time with the UK £20,000 annual allowance.
Open ISA calculatorWhy the ISA allowance is the one most people lose
Because ISA contributions can be made at any point across the tax year, it's easy to intend to "top up before the deadline" and then run out of time in late March. Unlike the pension annual allowance, there's no mechanism to recover unused ISA allowance later — a habit of contributing monthly, rather than trying to find a lump sum in the final weeks of the tax year, avoids this risk entirely.
Using the CGT annual exempt amount deliberately
Investors sitting on unrealised gains sometimes choose to realise a modest amount each year — up to the £3,000 annual exempt amount — rather than letting gains build up for years and then facing a much larger taxable gain if sold all at once. This is sometimes done via a "bed and ISA" process: selling an asset to use the exempt amount, then immediately repurchasing it within an ISA to shelter future growth from CGT.
Capital Gains Tax Calculator
Calculate Capital Gains Tax on property, shares and other assets for 2025/26.
Open Capital Gains Tax calculatorThe pension exception: carry forward up to three years
Unlike the other allowances on this list, the pension annual allowance genuinely can be "banked" — unused allowance from the three previous tax years can be added to the current year's £60,000 allowance, provided the individual was a member of a registered pension scheme throughout. This makes catching up on pension contributions after a lower-earning year, or ahead of retirement, considerably more flexible than the other use-it-or-lose-it allowances.
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Frequently asked questions
Which UK tax allowances reset every 5 April and can't be carried forward?
The ISA allowance (£20,000), the dividend allowance (£500), the Capital Gains Tax annual exempt amount (£3,000), and the annual gift exemption for Inheritance Tax (£3,000) are all use-it-or-lose-it — unused allowance in one tax year is simply lost, not carried into the next. This contrasts with the pension annual allowance, which can be carried forward for up to three years.
What happens to unused ISA allowance if I don't use it by 5 April?
Unused ISA allowance is lost permanently — it does not roll over into the next tax year. If you have £20,000 of ISA allowance in 2026/27 and only pay in £12,000, the unused £8,000 cannot be added on top of next year's allowance; you simply get a fresh £20,000 allowance from 6 April.
Can the Capital Gains Tax annual exempt amount be carried forward?
No. The £3,000 CGT annual exempt amount for 2026/27 applies only within that tax year — if you don't realise gains covered by it, the allowance is lost, not banked for a future year. This is one reason some investors deliberately realise smaller gains each year (within the exempt amount) rather than one large gain in a single year.
Does the dividend allowance carry forward if unused?
No, the £500 dividend allowance for 2026/27 resets each tax year and doesn't carry forward. Dividend income above the allowance is taxed at 10.75% (basic rate), 35.75% (higher rate) or 39.35% (additional rate) depending on the individual's overall income tax band.
Is the pension annual allowance different from the other use-it-or-lose-it allowances?
Yes — the pension annual allowance (£60,000 for most people in 2026/27) is unusual in that unused allowance from the previous three tax years can be carried forward and added to the current year's allowance, provided the individual was a member of a registered pension scheme in those years. This makes it the one major allowance that isn't strictly use-it-or-lose-it.
What is the annual gift exemption for Inheritance Tax and does it carry forward?
Each individual can give away up to £3,000 worth of gifts each tax year, immediately outside their estate for Inheritance Tax purposes, without needing to survive seven years for it to fall out of their estate. If unused, this £3,000 exemption can be carried forward for exactly one tax year (so a maximum of £6,000 can be given in a single year if the previous year's exemption wasn't used), but not beyond that.
What is the Marriage Allowance and can it be backdated?
The Marriage Allowance lets a non-taxpayer transfer £1,260 of their personal allowance to a basic-rate taxpaying spouse or civil partner, worth up to £252 a year. Unlike most use-it-or-lose-it allowances, it can be backdated up to four tax years if eligibility existed but the claim wasn't made at the time — so it's one of the few allowances where a missed year isn't necessarily lost forever, provided a backdated claim is made.
Should someone realise capital gains every year to use the annual exempt amount?
For investors with unrealised gains and no immediate need to sell, some choose to realise gains up to the £3,000 annual exempt amount each year (sometimes reinvesting via a 'bed and ISA' process) specifically to use the allowance before it's lost, rather than allowing gains to build up and potentially exceed several years' worth of exempt amounts if sold in one go later.
When exactly does the 2026/27 tax year end?
The 2026/27 tax year ends on 5 April 2027, at which point ISA, dividend, CGT and gift allowances for that year are lost if unused, and a fresh set of allowances begins on 6 April 2027 for the 2027/28 tax year.
What's a practical way to avoid missing these allowances each year?
Setting a personal reminder in February or March each year — well before the 5 April deadline — to review ISA contributions, any planned asset sales that could use the CGT exempt amount, dividend income levels, and gift-giving plans, gives enough time to act before the allowances reset, rather than reviewing them only after the deadline has passed.
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