Property, savings and dividend tax rate changes

Tax rates for different types of personal income are changing on different dates. The announced measures affect property income, savings income and dividend income, so the impact will depend on how you receive income and where you live in the UK.

This article summarises the rates stated for the relevant tax years. The measures remain subject to the final legislation and guidance, so check the position before making a decision about extracting profits, investing or changing how you hold property.

Property income rates from April 2027

Separate tax rates for property income are due to apply from April 2027. For the 2027 to 2028 tax year, the rates are planned to be:

• Property basic rate: 22%
• Property higher rate: 42%
• Property additional rate: 47%

These rates will apply in England, Wales and Northern Ireland. The government says 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.

For landlords, the distinction between rental income, allowable expenses, finance costs and other income will matter when assessing the practical effect. The headline rate is only one part of the calculation: ownership structure, mortgage interest, property expenses and the timing of income can all change the result.

Savings income rates from April 2027

The tax rates for savings income are also due to increase from April 2027. For the 2027 to 2028 tax year, the stated rates are:

• Savings basic rate: 22%
• Savings higher rate: 42%
• Savings additional rate: 47%

These rates apply across the UK.

The amount of tax due will still depend on the type of savings income, your other income and any available allowances. Interest can push someone into a higher band, particularly when combined with employment, pension, property or dividend income.

Dividend rates from April 2026

Dividend tax rates are due to change earlier, from April 2026. For the 2026 to 2027 tax year, the stated rates are:

• Dividend ordinary rate: 10.75%
• Dividend upper rate: 35.75%
• Dividend additional rate: 39.35%

These rates apply across the UK. The dividend additional rate remains unchanged at 39.35%.

Dividend tax applies after considering the dividend allowance and the taxpayer’s wider income position. For company directors and shareholders, the right comparison is usually between salary, dividends, pension contributions and retaining funds in the company, rather than looking at the dividend rate in isolation.

What landlords and company owners should review

Before the changes take effect, consider:

• Whether property income is received personally or through a company
• The effect of mortgage interest and finance-cost rules on taxable income
• How savings interest interacts with employment, pension and rental income
• Whether planned dividends should be reviewed alongside salary and pension contributions
• Whether cash should remain in a company for working capital or future investment
• How the changes affect your estimated tax payments and cash flow

Do not bring income forward or delay it solely because of a headline rate. The correct timing depends on the applicable tax rules, the nature of the income and your wider financial position.

These measures may change as legislation and HMRC guidance are published. Contact us if you want to review how the proposed property, savings or dividend rates could affect your own tax position.