An overview of when some of the key Budget changes come into effect in future tax years

The 2025 (and 2024) Autumn Budgets involved numerous announcements, many of which are to apply from future tax years. With that in mind, we have taken this opportunity to provide a breakdown of when some of the key changes come into effect:

6 April 2026	Income tax rates for dividend income will increase from 8.75% to 10.75% for basic rate taxpayers and from 33.75% to 35.75% for higher rate taxpayers. Additional rate taxpayers and discretionary trusts will continue to be taxed at 39.35%
	Income tax rates for non-savings and savings income remain at 20%, 40% and 45% for basic, higher and additional rate taxpayers (for non-savings income these rates will apply until 5 April 2031)
	Income tax relief for Venture Capital Trusts reduces to 20%
	Capital gains which qualify for business asset disposal relief will be taxed at 18%
	A £2.5 million threshold for 100% relief on business and agricultural relief takes effect
1 April 2027	Plan 2 Student Loans repayment threshold frozen at £29,385 for three years until April 2030
6 April 2027	Unused pension funds will be liable to inheritance tax
	Tax on savings income and property rental profits increases by 2%, to 22%, 42% and 47% for basic, higher and additional rate taxpayers and to 47% for discretionary trusts
	The cash ISA limit for those age 65 and under will reduce to £12,000 (those over age 65 will continue to be able to save up to £20,000)
1 April 2028	High value council tax surcharge will apply to properties valued over £2 million – the charge will start at £2,500 per year, rising to £7,500 per year for properties valued above £5 million. These charges will be increased in line with CPI inflation each year, starting from 2029/30
6 April 2029	Changes to pensions salary sacrifice rules apply with employee and employer National Insurance payable on contributions via salary sacrifice in excess to £2,000
5 April 2031	The following ‘freezes’ potentially come to an end: Income tax basic and higher rate thresholds National Insurance thresholds Inheritance tax (IHT) nil rate band and residence nil rate band, and £2.5 million threshold for 100% relief on business and agricultural relief ISA, Junior ISA and Lifetime ISA* investment limits

* The Government is set to publish a consultation in early 2026 on the implementation of a new, simpler ISA product to support first time buyers to buy a home. Once available, this new product will be offered in place of the Lifetime ISA.

Source: Techlink Professional

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