Global Daily Tax News, UK Confirms New Property, Savings, Dividends Tax Rates, (Dec 9, 2025)

The UK Government has released guidance on the announcement in the 2025 Budget of new rates of tax for property income, dividends income, and savings income.

The Government is raising rates of tax on savings, dividends, and property income to increase fairness in the tax system, as those in receipt of employment income are liable also to national insurance contributions.

As announced in the Budget, separate tax rates will apply to property income from April 2027, as follows:

• the property basic rate will be 22 percent;

• the property higher rate will be 42 percent; and

• the property additional rate will be 47 percent.

Since April 2017, the rates have been 20 percent for basic rate taxpayers, 40 percent for higher rate taxpayers, and 45 percent for additional rate taxpayers.

This will apply to England, Wales, and Northern Ireland. Further, the Government has said it will engage with the devolved governments of Scotland and Wales to provide them with the ability to set property income rates in line with their current Income Tax powers in their fiscal frameworks.

The same 22, 42, and 47 percent rates of tax will apply to savings income. These rates will apply across the UK.

The tax rates for dividend income will increase from April 2026. The rates for the 2026 to 2027 tax year are as follows:

• the dividend ordinary rate will be 10.75 percent;

• the dividend upper rate will be 35.75 percent; and

• the dividend additional rate will remain at 39.35 percent.

These rates will apply across the UK.

Currently, since April 2022, the rates have been 8.75 percent for basic rate taxpayers, 33.75 percent for higher rate taxpayers, and 39.35 percent for additional rate taxpayers.

In addition, from April 2027, the Income Tax calculation rules will be changed so that reliefs and allowances will only be applied to property, savings, and dividend income after they have been applied to other sources of income.

The legislation relating to the property rates, savings rates, and changes to ordering of the allocation of the Personal Allowance will take effect from April 6, 2027, for the 2027 to 2028 tax year and subsequent tax years.