The last two Budgets have handed investors and higher-net-worth individuals a run of tax changes, and if you own shares, property or a business, they affect what you keep.
Capital gains tax rates have jumped, dividend tax is climbing, the reliefs for business owners have been reformed, and pensions are being pulled into your estate. Some of this is already law you’re paying now. Some of it lands over the next few years.
These aren’t small tweaks – handled badly, they can cost you thousands. Handled well, there’s still plenty you can do.
Let’s break down what’s changed, what’s still coming, and how to plan around it.
Capital Gains Tax Rate Changes
Capital Gains Tax rose sharply in the 2024 Autumn Budget, and it has stayed there. The main rates are now 18% for gains that fall within the basic rate band and 24% for gains above it, and they apply to shares, second properties and most other assets alike.
The annual exempt amount is just £3,000 – a long way down from the £12,300 it stood at in 2022/23, which means far more disposals now produce a tax bill.
Here’s what that looks like in practice. A higher-rate taxpayer selling shares with a £50,000 gain (after the exempt amount) would have paid £10,000 at the old 20% rate. At 24%, they’ll pay £12,000 – an extra £2,000 on exactly the same gain.
The one piece of good news is that the rates were left alone in the 2025 Budget rather than pushed higher again.
For now, this is the current position. But with the allowance so small, the timing of a disposal matters more than it used to, and spreading sales across tax years to use more than one exemption is one of the simplest ways to keep the bill down. Gains can crop up in a range of situations, so it’s worth thinking ahead before you sell.
Dividend Tax Changes
Dividends have been squeezed from both directions. The Dividend Allowance has been cut to just £500. It was £5,000 as recently as 2017/18, before falling to £2,000 in 2018, £1,000 in 2023 and £500 in 2024. That alone pulls more of your dividend income into tax.
The bigger news is that the rates are going up too. From April 2026, the tax on dividends rises for basic and higher-rate taxpayers:
- Basic rate: up from 8.75% to 10.75%
- Higher rate: up from 33.75% to 35.75%
- Additional rate: unchanged at 39.35%
For someone whose dividends all fall within the higher-rate band, receiving £10,000 in dividends with the full £500 Dividend Allowance available, the two-percentage-point increase adds around £190 to the annual bill.
If you’re a company director taking dividends as part of how you pay yourself, this tips the salary-versus-dividend balance yet again. It’s worth sitting down and reworking that split rather than assuming last year’s approach still works best.
Investment Property Changes
Property has been a repeat target across both Budgets. The Stamp Duty Land Tax surcharge on second homes and buy-to-let purchases rose to 5% from 31 October 2024, so an investor buying a £250,000 property now pays around £15,000 in stamp duty once the surcharge and standard rates are combined. That’s a chunky addition to your upfront costs before you’ve earned a penny in rent. Stamp Duty applies in England and Northern Ireland; Scotland and Wales run their own equivalents at different rates.
Separate Rates for Rental Income
There’s a larger change on the way. From April 2027, property income will be taxed under its own separate rates in England, Wales and Northern Ireland, set higher than before:
- Basic rate: 22%
- Higher rate: 42%
- Additional rate: 47%
Finance-cost relief will still be given, but only at the 22% basic property rate. Scotland sits outside this measure and applies its own Income Tax framework, and the government has said it will give Scotland and Wales the power to set their own property income rates in time. For landlords already feeling the effect of the mortgage interest changes, this is another squeeze on rental profits.
The New Surcharge on Higher-Value Homes
On top of this, the government plans to introduce a High Value Council Tax Surcharge – widely dubbed the “mansion tax” – from April 2028 for homes in England worth £2 million or more. As announced, it would start at £2,500 a year for properties valued between £2 million and £2.5 million, rising to £7,500 a year for those above £5 million, though the detailed design is still under consultation.
Taken together, these changes make it worth reviewing whether your properties still deliver the returns you need. For some landlords, holding property through a limited company may look more attractive, though incorporation brings its own costs and isn’t right for everyone.
Business Asset Disposal Relief Changes
Business Asset Disposal Relief (BADR), formerly Entrepreneurs’ Relief, lets business owners pay a reduced rate of Capital Gains Tax when they sell qualifying business assets. That reduced rate has been climbing in stages, and it’s now at its highest point yet.
The disposal relief rate was 10% up to April 2025, rose to 14% for 2025/26, and stands at 18% for disposals from 6 April 2026. Investors’ Relief has followed the same path.
One point that’s easy to miss: BADR is capped at a £1 million lifetime limit on qualifying gains, so it’s the rate on that first £1 million that has moved. On £1 million of taxable qualifying gains (after any allowable losses and the annual exempt amount), the staged increase looks like this:
- Before 6 April 2025: 10% = £100,000
- 2025/26: 14% = £140,000
- From 6 April 2026: 18% = £180,000
That’s £80,000 more tax on the same gain than under the old rate. Any gain above the £1 million lifetime limit is taxed at the normal Capital Gains Tax rate – 24% for a higher-rate taxpayer – so on a larger sale the reduced rate only ever applies to the first £1 million.
If you’re planning to sell your business or exit in the next few years, the timing of the disposal, and how much of your lifetime limit you’ve already used, has become one of the most important decisions you’ll make. HMRC has also brought in anti-forestalling rules to stop people locking in the old rates artificially, so genuine commercial timing is what matters here.
Inheritance Tax on Business and Agricultural Property
This was one of the most contentious announcements of the 2024 Budget, but it has softened considerably since. The original plan capped 100% Agricultural Property Relief (APR) and Business Property Relief (BPR) at £1 million, with 50% relief on anything above that. After a strong reaction from farmers and business owners, the government backed down.
From 6 April 2026, the first £2.5 million of combined agricultural and business property relief qualifies for 100% relief. Value above that gets 50% relief – an effective rate of up to 20%. Crucially, the allowance is now transferable between spouses and civil partners, so a couple can pass on up to £5 million of qualifying assets between them, and more once you add the nil-rate bands.
Take an individual leaving £3 million of qualifying business assets, whose £325,000 nil-rate band has already been used against other parts of their estate. The first £2.5 million passes with full relief; the remaining £500,000 gets 50% relief, leaving £250,000 chargeable and a £100,000 inheritance tax bill at 40%. If the nil-rate band were still available, it would reduce that figure, or remove it entirely.
It’s still a real restriction for larger estates. Qualifying shares traded on markets that don’t meet HMRC’s definition of “listed”, such as AIM, can now receive Business Relief at only 50%, and they don’t use the £2.5 million allowance reserved for property qualifying for 100% relief. Shares in a qualifying private trading company can still attract 100% relief within your allowance.
It’s far gentler than first feared, but if you own a farm or business that could be caught, it’s worth reviewing your succession plans, as lifetime gifts or using trusts may still have a role.
Non-Dom Status Abolished
The non-domicile regime is gone. From 6 April 2025, it was replaced with a residence-based system, so UK residents are now generally taxed on their worldwide income and gains, whether or not they bring the money into the country.
There is relief for genuinely new arrivals. Under the Foreign Income and Gains (FIG) regime, someone who moves to the UK after at least ten consecutive tax years of non-residence can claim relief on their foreign income and gains for their first four years of UK residence – but it has to be claimed, and it only lasts those four years.
The government also introduced a Temporary Repatriation Facility, letting former remittance-basis users bring overseas funds to the UK at a reduced rate for a limited period. If any of this affects you, it’s very much a case for tailored advice, as the transitional rules are involved.
Pension Inheritance Tax Changes
From April 2027, unused pension pots will count as part of your estate for inheritance tax. Death-in-service benefits from registered pension schemes are excluded, but most other unused pension funds will be caught. That’s a real change from the current position, where pensions usually pass to your beneficiaries free of inheritance tax.
The knock-on effect is that estates which sit comfortably below the threshold today could be pulled over it. With the nil-rate band frozen at £325,000 until 5 April 2031, more families will be caught.
Say a couple has a £700,000 home and £500,000 in combined pension savings – a £1.2 million estate passing on the second death. If they leave the home to their children and both the nil-rate and residence nil-rate bands are available, their combined allowances can reach £1 million.
That still leaves £200,000 exposed, and an £80,000 inheritance tax bill that simply wouldn’t exist under today’s rules. The exact figure depends on how the estate is structured, but the direction is clear. If you’re likely to be affected, a few options are worth weighing up:
- Adjust your drawdown. Using more of your pension during your lifetime, while preserving other assets, may work out more efficiently.
- Rebalance your savings. Review how much you hold in pensions versus other investments.
- Make lifetime gifts. Gifting earlier can bring your overall estate down, subject to the usual seven-year rules.
- Check your arrangements. Some pension setups offer protections worth understanding before you act.
Planning Around the Changes
None of this needs to be faced blind. With a bit of foresight, you can adapt to the new rules and keep your strategy on track. Here’s where to focus.
- Use your tax-free wrappers. Investments inside an ISA or pension generally grow free of Income Tax and Capital Gains Tax, which counts for more as rates rise – though pension withdrawals can be taxable, and most unused pension wealth joins your estate for inheritance tax from April 2027. Note too that the government has announced the cash ISA limit will fall to £12,000 from April 2027 for those under 65 (over-65s keep the full £20,000 in cash), while the overall ISA allowance stays at £20,000.
- Time your disposals carefully. With a £3,000 CGT allowance and staged BADR rates, when you sell can matter as much as what you sell. Staggering disposals across tax years helps manage the bill.
- Reassess your property holdings. Higher stamp duty, the coming property income rates and the mansion tax all change the sums. It’s a good moment to check whether each property still earns its place.
- Review your succession plans. If you own a farm or business near the £2.5 million threshold, your will and ownership structure are worth checking well before they’re needed.
- There’s also an announced reform further out to keep in view. From April 2029, only the first £2,000 of pension contributions made through salary sacrifice each year will keep their National Insurance relief. You can still sacrifice more than that, but contributions above £2,000 will attract employee and employer National Insurance, which will matter for higher earners building their pensions this way.
How Double Point Can Help
As you can probably tell, these changes add up to a complicated picture for anyone with investments, property or a business to think about.
At Double Point, our team of chartered accountants works with investors and business owners to make sense of it. We’ll look at your position as a whole – not each tax in isolation – and find the reliefs, allowances and timing that suit you, as part of a wider tax planning approach that keeps your tax return in good order too.
To talk through what these changes mean for you, book a free consultation with us today.