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There have been lots of tax changes announced over the last two budgets. Some of these have introduced immediate changes, while others have had one, two or even three years lead in time.

Keeping track of what is happening, and when, will form an important backdrop to the advice process. The summary below provides a timeline of the new measures to be implemented in each tax year, allowing planners to identify which of their client’s may be affected and when they may need to take action.

CGT BADR rate increase Foreign income and gains regime replaces domicile test IHT for non-doms based on long term residency

Capital Gains Tax

• Business asset disposal relief, formerly known as entrepreneurs’ relief, increased from 10% to 14% on the first £1,000,000 of gains on qualifying business disposals during an individual’s lifetime.
  
  There will be a further increase to 18% in 2026. Those thinking of disposing of their business may wish to do this before 6 April 2026 to avoid the higher rate.

National Insurance Contributions

• The rate of employer NICs increased from 13.8% to 15%. At the same time, the Secondary Earnings Threshold – the point at which employers start paying NICs on an employee’s earnings – reduced from £9,100 a year to £5,000 a year. The 2025 budget extended the freeze on this threshold until April 2031.

Non-doms

• The remittance basis and the concept of domicile for tax purposes was abolished on 6 April 2025. The remittance basis is replaced by a new Foreign Income and Gains (FIG) regime which is determined by UK residency rather than domicile.
  
  
• IHT will now apply on worldwide assets where someone is deemed to be a long-term resident. This is typically where someone has been resident in the UK for more than 10 years in the last 20 years. These rules replace the domicile test. 
  
  

Dividend rates increase VCT tax relief cut Further CGT BADR rate increase Cap on APR and BPR relief at 100% BPR on AIM shares cut to 50%

Pensions

• The triple lock on State Pensions will be retained for the remainder of this parliament (next election must be held by 15 August 2029). This guarantees a 4.8% earnings-based increase in April 2026.
  
  The full New State Pension will increase to £241.30 a week (from £230.25) and the full Basic State Pension will increase to £184.90 a week (from £176.45) for single people and £295.65 a week (from £282.15) for married couples and civil partners.
  
  
• There are no changes to tax relief on pension contributions or tax-free cash, despite pre-budget rumours.

Income Tax

• The personal allowance remains at £12,570 and is frozen until April 2031.
  
  
• Both the higher and additional rate thresholds remain at 2025/26 levels and will remain frozen until April 2031. As pay increases, more people will be dragged into higher tax brackets. Additional pension contributions could keep taxpayers below the critical thresholds.
  
  
• The dividend ordinary rate and upper rate will increase to 10.75% (currently 8.75%) and 35.75% (currently 33.75%) respectively. There will be no changes to the additional rate which remains at 39.35%.
  
  Business owners who normally take their profits in the form of dividends may get more value by funding their pension with an employer contribution. The dividend allowance is unchanged at £500 a year.
  
  
• In Scotland, the thresholds for basic rate and intermediate rate will increase by 7.4% (to £16,537 and £29,526 respectively), meaning taxpayers will pay the 19% starting rate on more of their earnings. All other thresholds are unchanged.
  
  
• Investors in VCT schemes will see upfront income tax relief reduce from 30% to 20% from April 2026. Those contemplating an investment may wish to do so before April 2026.

Capital Gains Tax

• Business asset disposal relief will increase again from 14% to 18% on the first £1,000,000 of gains on qualifying business disposals during an individual’s lifetime.

Inheritance Tax

• Agricultural and business property relief will no longer be fully relievable at 100%. Qualifying business and agricultural assets will only be relievable at 100% on values up to £2,500,000 (originally this was set at £1,000,000). Anything over this will be relieved at 50%.
  
  In a further change to the original announcement, any unused part of this allowance will be fully transferable between spouses and civil partners, allowing up to £5,000,000 of qualifying assets to pass to other family members, in addition to the nil rate band.
  
  
• The new £2,500,000 allowance will not apply to AIM shares and other shares not listed on a recognised stock exchange, which will now only be relievable at 50%.
  
  
• The option to pay IIHT by equal annual instalments over 10 years interest-free will be extended to all property which is eligible for agricultural property relief or business property relief.
  
  
• The IHT nil rate band and residence nil rate band stays at £325,000 (where it has been since 2009) and £175,000 (unchanged since introduced in 2017) respectively and will now remain frozen until April 2031.

National Insurance Contributions

• The secondary threshold for NICs will be frozen at £5,000 until 2030-31. This is the threshold above which employers must collect and pay NI on an employee’s earnings. There are no changes to NI rates for employers and employees. Class 2 contributions for the self-employed will increase to £3.65 a week (from £3.50), and Class 3 voluntary contributions will go up to £18.40 a week (from £17.75).

IHT on pension savings on death Savings rate increase Rental income rate increase Cash ISA savings allowance reduced

Pensions

• On death, most unused pensions and lump sum benefits become subject to IHT. The main exceptions are lump sum death-in-service benefits and pension funds inherited by a spouse or civil partner.
  
  This will drag more estates into the IHT net and increase the liability on estates already exceeding the nil rate bands. These clients may wish to engage in IHT planning by either using life cover or commencing gifting to reduce the value of their estate.

Income Tax

• Tax on savings income (e.g. deposit interest) will increase by two percentage points in each tax band. Savings income falling in the basic, higher and additional rate bands will therefore be taxed at 22%, 42% and 47% respectively. The increases will also apply to chargeable event gains on investment bonds which are taxed as savings income. The rate for discretionary trusts will be 47%.
  
  
• The rates of tax on property income will also increase to 22%, 42% and 47%, depending on whether such income falls in the basic, higher or additional rate bands. The rate for discretionary trusts will be 47%.
  
  
• From April 2027, the income tax ordering rules will change meaning that the personal allowance must be set against earned income and pensions before dividend income, savings income and property income. This is already the way most people order their income so will only affect a small number of people.

ISAs

• Only individuals aged 65 and over will be able to save the full £20,000 into a Cash ISA. For those under 65, £20,000 can still be invested in an ISA each year, but the amount going into a Cash ISA limit will be capped at £12,000, with the balance available only for investment into a Stocks and Shares ISA.

Mansion tax introduced Minimum pension age increase to 57

Mansion Tax

• A new High Value Council Tax Surcharge will be imposed on properties worth £2,000,000 or more. The surcharge will start at £2,500 and will rise in stages until it reaches £7,500 for properties worth more than £5,000,000. It is expected that 99% of homes will not be affected by this change. More details will follow a public consultation in 2026.
  
  
• A similar charge is also to be applied in Scotland. Two new council tax bands will be created for properties valued between £1,000,000 and £2,000,000, and those valued over £2,000,000. Ultimately the rates charged will be decided by local authorities.

Minimum Pension Age

• As a reminder, the normal minimum pension age will increase from 55 to 57. The exceptions include clients with a protected pension age and those retiring in ill-health. The changes will therefore affect most individuals born after 5 April 1971. Clients who have started to access their pension benefits from age 55 but do not attain age 57 until after 5 April 2028 will have to stop further phased drawdown cystallisations and UFPLS payments until they reach 57. They will still be able to access any crystallised funds.

NI savings on pension salary sacrifice capped

Pensions

• From April 2029, the National Insurance exemption for pension contributions made by salary sacrifice, irrespective of when the sacrifice arrangement started, will be limited to £2,000 a year. This means that both employees and employers will have to pay NI on any salary sacrificed over this amount. Employer contributions that are not part of a sacrifice arrangement will continue to be free from NICs, and all pension contributions will still be exempt from income tax subject to the normal rules.

Summary

The overall effects of these changes will be that many taxpayers will pay more tax. Advisers will play a key part in making sure that planning is undertaken with the knowledge of future tax changes and ensure any extra burden on their clients is minimised.