Upcoming tax rate changes
Announced at Autumn Budget 2025. These are future changes not yet in effect — dividend rates change from April 2026; new property income rates and higher savings rates from April 2027.
• Dividend rates: from 6 April 2026 (2026/27 tax year)
• Savings & property income rates: from 6 April 2027 (2027/28 tax year)
These rates do not apply to the current 2025/26 tax year — see current 2025/26 rates.
Source: HMRC — published November 2025. View official GOV.UK publication →
Dividend tax rate changes — from April 2026
Applies to the 2026/27 tax year and subsequent years. Affects all UK taxpayers receiving dividend income.
| Band | Current (2025/26) | From April 2026 | Change |
|---|---|---|---|
| Dividend Allowance | £500 (tax-free) | £500 (tax-free) | — |
| Basic Rate (Ordinary Rate) | 8.75% | 10.75% | +2pp |
| Higher Rate (Upper Rate) | 33.75% | 35.75% | +2pp |
| Additional Rate | 39.35% | 39.35% | No change |
Savings income tax rate changes — from April 2027
Applies to the 2027/28 tax year and subsequent years. Affects UK taxpayers with savings interest above their Personal Savings Allowance.
| Band | Current (up to 2026/27) | From April 2027 | Change |
|---|---|---|---|
| Basic Rate | 20% | 22% | +2pp |
| Higher Rate | 40% | 42% | +2pp |
| Additional Rate | 45% | 47% | +2pp |
| Personal Savings Allowance (unchanged) | Tax-free interest |
|---|---|
| Basic Rate Taxpayer | £1,000 |
| Higher Rate Taxpayer | £500 |
| Additional Rate Taxpayer | £0 (no allowance) |
These rates apply across the UK, including Scotland. The PSA and Starting Rate for Savings remain unchanged.
New property income tax rates — from April 2027
From 6 April 2027, property income will have its own separate tax rates for the first time. This applies to England, Wales and Northern Ireland.
| Band | Previous Rate (up to 2026/27) | New Rate (from 2027/28) | Change |
|---|---|---|---|
| Property Basic Rate | 20% | 22% | +2pp |
| Property Higher Rate | 40% | 42% | +2pp |
| Property Additional Rate | 45% | 47% | +2pp |
🏘️ Non-resident landlords: secondary legislation will be updated to reflect the new basic rate for property income in the Non-Resident Landlord scheme and for property income distributions from REITs and property authorised investment funds.
⚠️ Scale of impact: an estimated 2.4 million landlords will be affected from April 2027.
Change to ordering of allowances & reliefs — from April 2027
A technical but important change to how Income Tax is calculated — affecting taxpayers with multiple income sources.
Before
Reliefs and allowances (such as the Personal Allowance) could be applied to property, savings and dividend income in any order, potentially reducing tax on those income types first.
After
From April 2027, general reliefs and allowances will only be applied to property, savings and dividend income after they have been applied to other income sources (e.g. employment, self-employment income).
✅ What stays the same: reliefs and allowances specific to a particular type of income (e.g. the Personal Savings Allowance) still apply to those income types first where relevant.
💬 Plain English: if you have a salary and also earn rental income or dividends, your Personal Allowance will now be used up by your salary first. More of your property/savings/dividend income could fall into a taxable band — at the new higher rates. All the more reason to plan ahead.
Why is the government making these changes?
The government's stated objective is to ensure income from assets is taxed more fairly. Currently, those with property, savings or dividend income pay less tax than those whose income comes from employment or self-employment — primarily because asset income does not attract National Insurance Contributions (NICs).
By increasing rates on property, savings and dividend income, the government aims to narrow the gap between tax paid on work and tax paid on income from assets. An estimated 2.4 million landlords and 3.8 million individuals with savings income above tax-free allowances will be affected by 2029/30.
Who is likely to be affected?
🏠 Landlords & Property Investors
Individuals receiving income from letting residential or commercial property. Estimated 2.4 million landlords affected from April 2027.
💰 Savers & Investors
Individuals earning interest from savings accounts, bonds, peer-to-peer lending and other savings products above their Personal Savings Allowance.
📈 Shareholders & Company Directors
Individuals receiving dividend income from shares or company distributions, including director-shareholders of limited companies.
Current 2025/26 rates → · ← All tax rates
Disclaimer: These rates are for guidance only and are based on HMRC published figures. Tax rules depend on individual circumstances and may change. Always seek professional advice before acting — get in touch for advice specific to your situation.
Worried about these changes?
These rate increases could significantly affect your tax bill. Book a free consultation to understand your options and plan ahead.