The Autumn Budget 2026, unveiled on 28 October 2026, includes a further increase in the rates of income tax applied to savings income and property income, effective from 6 April 2027. The government will raise the dividend tax rates and the tax rates on interest and rental income by 1.25 percentage points for higher-rate and additional-rate taxpayers. This measure aligns the tax treatment of unearned income more closely with earned income and is expected to generate additional revenue for public services. The changes will affect individual investors, landlords, and trustees, requiring updates to tax planning strategies and compliance processes. ICAEW advises affected taxpayers to review their portfolio structures and consider tax-efficient wrappers such as ISAs and pensions to mitigate the impact.
Key Takeaways
- Rate Increases: Dividend tax rates rise to 9.75% (basic), 33.75% (higher), and 39.35% (additional); savings and property income rates increase similarly for higher and additional rate bands.
- Effective Date: Changes apply from the 2027/28 tax year, giving taxpayers a short window to restructure holdings before implementation.
- Planning Opportunities: Maximising ISA allowances, pension contributions, and considering incorporation for property portfolios are key mitigating actions.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement