Dividends, savings and property income: what the new tax rates mean for you

If you receive income from dividends, savings or rental property, it’s worth understanding what has already changed from 6 April 2026 and what is due to change from 6 April 2027. These changes affect three of the most common sources of personal income, so reviewing your position now could help you plan with greater confidence.

HMRC’s technical note confirms that from 6 April 2026, dividend tax rates will increase to 10.75% at the ordinary rate and 35.75% at the upper rate, while the additional rate remains 39.35%. The dividend allowance will remain £500.

From 6 April 2027, taxable savings income above any available 0% savings allowances will be taxed at 22%, 42% and 47%, while taxable property income will also be subject to separate rates of 22%, 42% and 47% in England, Wales and Northern Ireland.

What this means for you

If you receive dividend income outside ISAs or pensions, now is a good time to review your position. Savers should check whether their interest is likely to exceed the Personal Savings Allowance, while landlords should consider how the new 2027/28 property rates could affect future taxable rental profits.

HMRC has also confirmed that the starting rate for savings and the Personal Savings Allowance remain unchanged. The Rent a Room Scheme and property allowance are also unchanged.

Planning ahead

Where appropriate, consider making full use of your ISA allowances and keep accurate records of dividend vouchers and bank interest. If you own rental property, review your expected taxable profit after allowable deductions and reliefs rather than simply focusing on rental income received.

The new rules also change the income tax calculation so that allowances and reliefs are applied first against non-property, non-savings and non-dividend income where possible. From 2027/28, this means the order in which different types of income are taxed may become more significant.