With the new tax year just weeks away, a number of personal tax changes will come into effect from 6 April 2026.
For many people, the day-to-day impact may feel modest at first. However, several changes could affect how much tax you pay, how you plan income, and how you approach longer-term decisions such as succession and estate planning.
Below is a summary of some of the key changes to have on your radar for the 2026/27 tax year.
Dividend tax rates are increasing
From April 2026, dividend tax rates will increase by 2 percentage points.
The new rates for 2026/27 are:
10.75% (ordinary rate)
35.75% (upper rate)
39.35% (additional rate remains unchanged)
This is particularly important for company owners who draw income through a mix of salary and dividends, as it may affect the most tax-efficient way to extract profits from your business.
Income tax thresholds remain frozen
The Personal Allowance and the main UK income tax thresholds remain frozen, and this continued freeze is expected to keep increasing the number of people pulled into higher tax bands over time (often referred to as fiscal drag).
For Scottish taxpayers, there are changes to some income tax bands and thresholds for 2026/27, which may slightly improve take-home pay for some lower earners. However, higher earners may still feel the impact of frozen thresholds more noticeably.
National Insurance and voluntary contributions
Voluntary National Insurance contributions are often considered by people who:
have gaps in their NI record
are self-employed with low profits
have spent time working overseas
From 6 April 2026, the weekly voluntary rates are expected to increase to:
Class 2: £3.65
Class 3: £18.40
There is also an important rule change affecting some people overseas, as voluntary Class 2 is no longer expected to be available in certain circumstances, meaning Class 3 may be the only option.
Capital Gains Tax and business disposals
If you are considering selling or restructuring a business, Capital Gains Tax planning remains a key area for 2026/27.
For gains qualifying for Business Asset Disposal Relief (BADR) or Investors’ Relief, the tax rate is due to rise to 18% from 6 April 2026 (up from 14% in 2025/26).
That means timing, structure, and planning around any disposal or succession strategy could make a significant difference.
Inheritance Tax: APR and BPR changes from April 2026
Changes to Agricultural Property Relief (APR) and Business Property Relief (BPR) are due to take effect from 6 April 2026.
Under the updated rules, 100% relief will apply to the first £2.5 million of qualifying agricultural and business property (combined), with relief generally reducing to 50% above that level. Unused allowance may be transferable to a surviving spouse or civil partner, subject to the rules.
These changes will not affect every estate, but for business owners, farmers and families with significant qualifying assets, it is well worth reviewing your position sooner rather than later.
What this means for you
The right approach will depend on your circumstances, but this is a good time to review:
how you take income (salary vs dividends)
your National Insurance record and any gaps
plans to sell, gift or restructure business assets
your estate and succession planning strategy
Need help planning for 2026/27?
If you think any of these changes may affect you, we can help you review your position and plan ahead with confidence.
Get in touch to discuss your tax position and make sure you are prepared for the 2026/27 tax year.