Key tax changes for 2026/27

The past two Autumn Budgets have set the stage for a number of tax changes from 6 April 2026. From increases in the Capital Gains Tax (CGT) rate for business asset disposal relief to amends to agricultural and business property relief, it’s important to know what’s changing and how it might affect you.

Key tax changes from 6 April 2026

There are several reforms beginning from 6 April 2026 you should be aware of:

• Dividend tax – The dividend tax rates will rise, with the basic rate increasing from 8.75% to 10.75% and the higher rate increasing from 33.75% to 35.75%. The additional rate will remain unchanged at 39.35%.[1]
• CGT – Gains that qualify for Business Asset Disposal Relief or Investors’ Relief will be taxed at 18%, up from the previous 14% rate.
• Agricultural and business property relief – Assets qualifying for Agricultural Property Relief (APR) and Business Property Relief (BPR) up to a combined value of £2.5 million will continue to benefit from 100% inheritance tax relief. For APR and BPR assets above this threshold, relief will apply at a rate of 50% on the excess.[2] You can read more about these changes here: New IHT changes explained for business owners and farmers : What’s changing and who does is affect? | Saltus

Changes to VCT investments – Upfront income tax relief on Venture Capital Trusts will reduce from 30% to 20%. You can find out more in our article: 2025 Autumn Budget analysis : Winners, losers and what’s next… | Saltus.

How do frozen thresholds impact you?

Alongside the headline tax changes taking effect from 6 April 2026, personal tax thresholds will remain frozen till 2031.[3] While from the outset frozen thresholds may not seem too bad, their long term impact can be substantial as they can expose more of your income, gains and estate to tax over time. This means you can feel as though your earnings are only keeping pace with the cost of living yet still find yourself paying a larger share of your income to HMRC each year.

Known as fiscal drag, this can be especially relevant for higher earners and individuals with significant investment portfolios. These are also called stealth taxes and are a way for governments to increase tax revenue without directly increasing headline tax rates.[4]

When National Insurance thresholds are also frozen, a growing proportion of your salary can be exposed to employee and employer NICs as earnings increase. At the same time, long‑standing freezes to inheritance tax thresholds mean that as property prices and investment values rise, more estates are brought into the IHT net and a greater share of wealth on death becomes taxable at 40%. For investors, the picture is reinforced where allowances, such as those for dividends and capital gains, are reduced or left unchanged: more of the return on your capital is taxed, even where part of that return simply reflects inflation rather than a real increase in spending power.

What this means for you?

Against the backdrop of higher dividend tax rates from 6 April 2026, and new limits on reliefs such as APR and BPR, the continued freezing of key thresholds can make proactive planning more important.

Reviewing how and when you take income, structure business profit extraction, realise gains, and pass on wealth to the next generation can help to mitigate the impact of these changes and ensure that more of what you earn and build is kept within your family rather than lost to unnecessary tax.