Income Tax
Income tax rates have not been raised, but the income tax thresholds have been frozen for a further three years (from the previous 2027 date).
Property, savings and dividends income
The tax rates for income from property, savings and dividends will rise.
For dividends, the ordinary rate will rise from 8.75% to 10.75%, and the upper rate from 33.75% to 35.75% from 6 April 2026. The additional rate will remain unchanged at 39.35%.
On savings, the rate will increase by 2 percentage points across all bands. The basic rate will rise from 20% to 22%, the higher rate from 40% to 42%, and the additional rate from 45% to 47% from 6 April 2027.
A new property tax rate will be introduced from 6 April 2027, the property basic rate will be 22%, the property higher rate will be 42% and the property additional rate will be 47%. This is intended to target property owners such as landlord with a higher tax than income tax.
Mansion Tax
A high value council tax surcharge will be introduced from 6 April 2028. The charge will require a revaluation of properties, and will be £2,500 per year on properties worth more than £2,000,000 and £7,500 per year on properties worth more than £5,000,000. It will be payable by the homeowner, not the occupier.
Inheritance tax – agricultural and business property relief
Under the upcoming reforms to 100% relief, the £1,000,000 per-person cap or 'nil-rate-band' being introduced will be transferrable between spouses. This will come into effect on 6 April 2026 in line with the other relevant changes to the reliefs already announced. It will apply where the first death occurred before 6 April 2026.
Pension Contributions
Salary sacrifice pension contributions above £2,000 will be subject to both employer and employee national insurance contributions from 6 April 2029.
ISAs
The £20,000 cash ISA allowance will reduce to £12,000 for those under 65 from 6 April 2027. The overall ISA allowance of £20,000 will remain unchanged.
Capital gains tax – anti-avoidance
Anti-avoidance provisions which apply to share exchanges and company reorganisations will be updated, and the changes will have effect from 26 November 2025.
Post-departure trade profits
Dividends received during a period of temporary non-residence will be chargeable to UK tax from 6 April 2026.
Inheritance Tax – anti-avoidance
Three new rules are being introduced:
- there will be an exit-charge where the settlor of a trust ceases being a long-term-UK-resident and then the trust property changes from UK situs to non-UK. This applies from 26 November 2025;
- non-UK companies/vehicles which hold UK agricultural land and/or buildings will be deemed situated in the UK (as with those that hold UK residential land). This will apply from 6 April 2026; and
- the charity exemption will be limited to gifts made directly to UK registered charities and community amateur sports clubs – gift to non-registered and/or foreign charities will not benefit from the exemption. This will apply to lifetime gifts from 25 November 2025 and on death from 6 April 2026.
Inheritance Tax – Trusts – former non-doms
The potential Inheritance tax charges for trusts which held excluded property on 30 October 2024 and were settled by former non-domiciled individuals (who became long-term-UK-resident), will be capped at £5m each ten-year anniversary. This has effect from 6 April 2025.
Non-resident capital gains tax
For the purpose of non-resident-capital-gains-tax, two changes will be made:
- clarification as to when individuals have to make a double tax treaty claim; and
- the definition of UK property rich entity will be refined to provide that the individual protected cell company cell is assessed (not the protected cell company itself).
This applies to disposals made by protected cell companies from 26 November 2025, to other companies from 1 April 2026 and to individuals from 6 April 2026.