Changes to tax rates for property, savings and dividend income
This technical note provides details about establishing separate tax rates for property income and increasing tax rates for savings and dividend income.
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Details
The government is creating separate tax rates for property income. From 2027 to 2028, the property basic rate will be 22%, the property higher rate will be 42%, and the property additional rate will be 47%, from April 2027.
The government is increasing the rates of income tax applicable to savings income by 2 percentage points across all bands from April 2027 and increasing the rates of Income Tax applicable to dividend income at the ordinary and the upper rate by 2 percentage points from April 2026. The dividend additional rate will remain unchanged.
Also, the government is changing Income Tax rules so that reliefs and allowances deductible at steps 2 and 3 of the Income Tax calculation will only be applied to property, savings and dividend income after they have been applied to other sources of income.