Tax Changes to Watch: a Straightforward Timeline

By Marcus Perks BSc (Hons) DipPFS

Independent Financial Adviser | Supportive Financial Planning

There have been several tax changes announced across recent budgets, and many more are scheduled to take effect over the next few years. Below is a clear, consumer-friendly timeline of the main measures and what they could mean for your finances. If any item looks relevant to you, please get in touch so we can review your plan.

From 6 April 2025

• Capital gains on qualifying business disposals: Relief previously called entrepreneurs’ relief (now Business Asset Disposal Relief) rose to 14% on the first £1m of lifetime gains. Another increase is due in 2026, so business owners considering a sale may want to review timing.

• Employer National Insurance: Employers’ NICs rose and the earnings threshold at which employers start paying NICs was lowered and frozen to 2031, affecting payroll costs.

• Non‑UK domiciles: The old domicile test and remittance basis were replaced by a residency-based Foreign Income & Gains regime. Long-term residents (generally >10 years in the last 20) may now face UK Inheritance Tax on worldwide assets.

From 6 April 2026

• Dividends and VCTs: Dividend tax rates increase (basic and upper bands). Upfront income tax relief for Venture Capital Trust investments is cut from 30% to 20% — consider timing if you’re planning a VCT investment.

• Business disposals: The preferential CGT rate for qualifying disposals rises further to 18% for the first £1m of gains.

• Inheritance Tax reliefs: Agricultural and Business Property Reliefs will be limited — full relief at 100% will only apply up to a £2.5m allowance, with amounts above that relieved at 50%. AIM and unlisted shares will not get the full allowance. The allowance can be transferred between spouses, effectively increasing the family limit. Options to pay certain IHT liabilities over 10 years interest-free will be extended.

• Pensions & state pension: State Pension increases under the triple lock remain in place; no changes were made to pension tax reliefs or tax-free cash.

• Income tax thresholds: Personal allowance and higher-rate thresholds remain frozen until 2031 — pay growth could move people into higher bands. In Scotland, some thresholds are uprated.

• National Insurance: Secondary threshold remains frozen; small increases to Class 2 and Class 3 rates for the self‑employed.

From 6 April 2027

• Pensions and IHT: Most unused pension pots and lump sums will be subject to Inheritance Tax on death (with some exceptions). This may increase estate tax exposure and make IHT planning more important.

• Savings and rental income: Tax on savings and property income will rise by 2 percentage points in each band. The ordering of income for allowance use changes so earned income and pensions are set against the personal allowance first.

• ISAs: Only those aged 65+ will be able to put the full annual £20,000 allowance into a Cash ISA; under‑65s will be limited to £12,000 in a Cash ISA, with the remainder for Stocks & Shares ISAs.

From 6 April 2028

• High-value property surcharge: A new council tax-style surcharge for very high-value homes is planned for properties worth £2m+ (details to follow after consultation). Most households won’t be affected.

• Minimum pension age: The normal minimum age to access pension benefits rises from 55 to 57 for most people born after 5 April 1971. Protected pension ages and ill‑health cases are exempt.

From 6 April 2029

• NIC and pension salary sacrifice: The National Insurance exemption on salary‑sacrifice pension contributions will be limited to £2,000 a year. Employer contributions outside of sacrifice arrangements remain NIC-free.

What this means for you

Overall, the changes will increase your tax bill across multiple income and wealth streams and reduce the reliefs you can get.

Practical actions to consider now:

• Review timing for business disposals and certain investments (e.g. VCTs).

• Revisit pension and estate planning in light of IHT and pension changes.

• Check dividend strategies and whether employer pension contributions are more tax efficient.

• Keep an eye on pay increases pushing you into higher tax bands.

Speak to Us

To get personalised guidance on how any of these changes affect your situation, contact Supportive Financial Planning and book a free consultation now.

📞 Call us on 0345 257 8494

📧 Email cliveperks@supportivefp.co.uk

🌐 Or request a free consultation via our “book a free consultation” button.

A little planning today can save your family stress, uncertainty, and potentially thousands of pounds tomorrow.

This article is for information only and does not constitute financial advice. Tax rules and thresholds are subject to change. Figures and case details are correct as of January 2026. Source: Tax timeline – what is happening and when - Aberdeen.