{"id":12880,"date":"2026-04-09T15:02:35","date_gmt":"2026-04-09T15:02:35","guid":{"rendered":"https:\/\/www.wealthtime.com\/advisers\/?post_type=blog&#038;p=12880"},"modified":"2026-04-09T15:45:58","modified_gmt":"2026-04-09T15:45:58","slug":"welcome-to-tax-year-2026-27","status":"publish","type":"blog","link":"https:\/\/www.wealthtime.com\/advisers\/blog\/welcome-to-tax-year-2026-27\/","title":{"rendered":"Welcome to tax year 2026\/27"},"content":{"rendered":"\n<p class=\"has-medium-font-size\"><strong>What\u2019s changed, what\u2019s stayed the same, and what\u2019s next?<\/strong> Some allowances remain frozen, others have been adjusted, and there\u2019s additional change on the horizon. Here\u2019s a concise overview to help you get to grips with the tax and planning changes that took effect on 6 April 2026.<\/p>\n\n\n\n<div style=\"height:50px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What\u2019s changed for 2026\/27?<\/strong><\/h2>\n\n\n\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Dividend Tax Rates Increase<\/strong><\/h3>\n\n\n\n<p>From 6 April 2026, dividend tax rates have risen by 2% for basic and higher\u2011rate taxpayers:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Basic rate: 10.75% (up from 8.75%)<\/li>\n\n\n\n<li>Higher rate: 35.75% (up from 33.75%)<\/li>\n\n\n\n<li>Additional rate: unchanged at 39.35%<\/li>\n<\/ul>\n\n\n\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><strong><strong>Business relief cap introduced<\/strong><\/strong><\/h3>\n\n\n\n<p>A major change to inheritance tax (IHT) planning was the new \u00a32.5m cap now on the combined value of business and agricultural property eligible for 100% relief. Value above this cap receives only 50% relief. <\/p>\n\n\n\n<p>All qualifying unquoted shares traded on recognised exchanges (e.g. AIM shares) will only qualify for 50% relief, but won\u2019t count toward the \u00a32.5m cap.<\/p>\n\n\n\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><strong><strong><strong>Venture Capital Trust (VCT) income tax relief reduced<\/strong><\/strong><\/strong><\/h3>\n\n\n\n<p>The VCT income tax relief rate for investors has dropped from 30% to 20%.<\/p>\n\n\n\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><strong><strong><strong><strong>CGT rate for BADR and IR increased<\/strong><\/strong><\/strong><\/strong><\/h3>\n\n\n\n<p>The Capital Gains Tax (CGT) rate for Business Asset Disposal Relief (BADR), and Investors Relief (IR), increased from 14% to 18% for qualifying disposals made after 6 April 2026.<br>This completes the phased increase announced in the Autumn Budget 2024.<\/p>\n\n\n\n<div style=\"height:50px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What\u2019s <em>not <\/em>changed for 2026\/27?<\/strong><\/h2>\n\n\n\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><strong><strong>ISA and Junior ISA Subscription Limits<\/strong><\/strong><\/h3>\n\n\n\n<p>Subscription limits remain:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>ISA limit: \u00a320,000<\/li>\n\n\n\n<li>JISA limit: \u00a39,000<\/li>\n<\/ul>\n\n\n\n<p>The changes to cash ISA limits for under\u201165s begin in 2027\/2028.<\/p>\n\n\n\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><strong><strong><strong>Income Tax personal allowance and thresholds frozen<\/strong><\/strong><\/strong><\/h3>\n\n\n\n<p>The \u00a312,570 personal allowance remains frozen until 5 April 2031.<\/p>\n\n\n\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><strong><strong><strong><strong>Capital Gains Tax (CGT) annual exemption<\/strong><\/strong><\/strong><\/strong><\/h3>\n\n\n\n<p>The annual CGT exemption remains at \u00a33,000 for 2026\/27.<\/p>\n\n\n\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><strong><strong><strong><strong><strong>Inheritance tax nil\u2011rate bands<\/strong><\/strong><\/strong><\/strong><\/strong><\/h3>\n\n\n\n<p>Bands continue to be frozen until 5 April 2031:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>\u00a3325,000 standard nil\u2011rate band<\/li>\n\n\n\n<li>\u00a3175,000 residence nil\u2011rate band (with taper starting at \u00a32m).<\/li>\n<\/ul>\n\n\n\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><strong><strong><strong><strong><strong><strong>Pensions<\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/h3>\n\n\n\n<p>Remaining the same for 2026\/27:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Standard Annual Allowance: \u00a360,000<\/li>\n\n\n\n<li>Money Purchase Annual Allowance (MPAA): \u00a310,000<\/li>\n\n\n\n<li>Tapered Annual Allowance: unchanged<\/li>\n\n\n\n<li>Lump Sum Allowance: \u00a3268,275<\/li>\n\n\n\n<li>Lump Sum and Death Benefit Allowance: \u00a31,073,100<\/li>\n<\/ul>\n\n\n\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><strong><strong><strong><strong><strong><strong><strong>Dividend allowance and CGT environment tighten<\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/h3>\n\n\n\n<p>Although unchanged for 2026\/2027, the combination of:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>low dividend allowance (\u00a3500)<\/li>\n\n\n\n<li>low capital gains tax exemption (\u00a33,000)<\/li>\n\n\n\n<li>the 2026 dividend tax increase<\/li>\n<\/ul>\n\n\n\n<p>makes wrapper strategy (use of ISAs, pensions, bonds) increasingly important this year.<\/p>\n\n\n\n<div style=\"height:50px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><strong><strong>Looking ahead: future changes to prepare for<\/strong><\/strong><\/h2>\n\n\n\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><strong><strong><strong><strong><strong><strong><strong><strong>Pension death benefits to become subject to Inheritance Tax (from 6 April 2027)<\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/h3>\n\n\n\n<p>The regulations have not been laid yet and, as such, these details may change, but as it stands, unused pension funds will fall within IHT scope, potentially triggering double taxation (IHT and income tax for beneficiaries).<\/p>\n\n\n\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><strong><strong><strong><strong><strong><strong><strong><strong><strong>Cash ISA contribution limits changing (from 2027)<\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/h3>\n\n\n\n<p>From 6 April 2027, the cash ISA limit for under\u201165s falls to \u00a312,000, making broader ISA planning in 2026\/27 important.<\/p>\n\n\n\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong>Taxation of bonds changing (from 2027 but impacts 2026\/27 planning)<\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/h3>\n\n\n\n<p>Though not effective until 6 April 2027, planning may need to happen in 2026\/27:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>2% rise to non\u2011dividend income tax inside UK life policyholder funds<\/li>\n\n\n\n<li>2% rise in tax on chargeable event gains made on UK and offshore\/international investment bonds<\/li>\n\n\n\n<li>UK bond tax credit increases from 20% to 22% to offset this<\/li>\n<\/ul>\n\n\n\n<div style=\"height:50px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<div style=\"height:50px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Read more<\/strong><\/h2>\n\n\n\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>The ultimate guide to tax year end and tax year start<\/strong> planning<\/h3>\n\n\n\n<p>Published pre-tax year end, this guide takes you through everything to consider at the end of tax year 2025\/2026 and the start of tax year 2026\/27. &nbsp;<\/p>\n\n\n\n\n    <a href=\"https:\/\/www.wealthtime.com\/advisers\/tax-year-end-hub\/insights-and-analysis-for-tax-year-end-2025-2026\/#sign-up\" target=\"_blank\" class=\"button black\" style=\"margin-bottom: 1rem;\">\n        Download your copy now    <\/a>\n\n\n\n<div style=\"height:50px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><em>This article is intended for regulated financial advisers and investment professionals only.<\/em><\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n","protected":false},"author":17,"featured_media":12881,"template":"","class_list":["post-12880","blog","type-blog","status-publish","has-post-thumbnail","hentry"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Welcome to tax year 2026\/27 - Advisers<\/title>\n<meta name=\"robots\" content=\"index, follow, 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