The government announced a number of measures affecting property owners, savers and shareholders in the Autumn Budget 2025. Individuals will also be affected by the government’s decision to extend the freeze on the personal allowance and income tax thresholds. This is considered in a separate article.  

Increased rates of income tax

The government announced that:

• For 2026/27 onwards, the basic and higher rates of income tax on dividends will increase by two percentage points. The basic rate will increase to 10.75% from 8.75% and the higher rate to 35.75% from 33.75%. The additional rate for dividend income, will continue at 39.35%. 
• For 2027/28:
  • The rates of income tax on savings will increase by two percentage points. From 6 April 2027, the basic rate will be 22% (currently, 20%), the higher rate 42% (40%) and the additional rate 47% (45%).  
  • Separate tax rates will apply to income from property. The new property income rates will be set at the same level as for savings income (see above).  
  • Income tax rules will be changed so that any reliefs and allowances deductible at steps two and three of the income tax calculation are applied to property, savings and dividend income after they have been applied to other sources of income. Currently, allowances can be allocated in the most favourable way.  

The rates of tax on dividends and savings income apply to taxpayers across the UK. However, the rates of tax on property for Scottish and potentially Welsh taxpayers, will be determined by the devolved governments. 

Further information

• Change to tax rates for property, savings and dividend income

Cash ISA limits reduced 

From 6 April 2027, savers will be able to invest a maximum of £12,000 annually in a cash ISA. Individuals who are aged 65 or over can continue to invest at the current limit of £20,000 per year.  

The ISA limits will stay at the current thresholds of £20,000 overall, £4,000 for lifetime ISAs and £9,000 for junior ISAs until 5 April 2031. 

High-value homes 

The government has announced that it will introduce a high value council tax surcharge on residential properties in England worth £2m or more. The charge will take effect in April 2028. The Valuation Office will conduct a targeted valuation exercise to identify properties above £2m and therefore in scope. The amount charged will be between £2,500 and £7,500 per year based on the value of the property. A consultation on the new surcharge will be held in early 2026.