6 April 2026 Personal Tax Changes: What You Need to Know Now

The 6 April 2026 marks the start of the 2026/27 UK tax year, bringing with it several important changes to personal taxation. Here is a concise summary of what has changed and what it means for expatriates and internationally mobile individuals.

Income Tax Allowances and Bands

The personal allowance remains frozen at £12,570 for 2026/27, a continuing consequence of the income tax threshold freeze announced in the March 2021 Budget and extended through to April 2028. With wage growth, more taxpayers are being pulled into higher rate brackets each year (fiscal drag).

2026/27 income tax bands (England, Wales and Northern Ireland):

| Band | Rate | Income Range | |---|---|---| | Personal allowance | 0% | Up to £12,570 | | Basic rate | 20% | £12,571-£50,270 | | Higher rate | 40% | £50,271-£125,140 | | Additional rate | 45% | Above £125,140 |

The personal allowance is tapered at £1 for every £2 of income above £100,000, creating an effective 60% marginal rate between £100,000 and £125,140.

Dividend Allowance

The dividend allowance, the amount of dividend income that can be received free of income tax, remains at £500 for 2026/27, following the reduction from £1,000 to £500 in April 2024. This affects expatriates who receive dividends from UK companies.

Capital Gains Tax

The CGT rates introduced in the October 2024 Budget remain in place for 2026/27:

• 18% for basic rate taxpayers (residential property: 18%)
• 24% for higher and additional rate taxpayers (residential property: 24%)
• 20% for business asset disposals (subject to Business Asset Disposal Relief, annual limit £1 million over a lifetime)

The annual exempt amount remains at £3,000, a significant reduction from the historic £12,300 allowance.

Inheritance Tax

The key IHT thresholds are frozen until at least April 2030:

• Nil rate band: £325,000
• Residence nil rate band: £175,000 (subject to the £2 million taper)

As covered extensively in our other articles, the Long-Term Resident rules that took effect on 6 April 2025 continue to apply, meaning worldwide assets of LTR individuals are within the UK IHT net.

Making Tax Digital, Live for Income Above £50,000

From 6 April 2026, Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA) is mandatory for:

• Self-employed individuals with qualifying annual income above £50,000
• Landlords with qualifying annual income above £50,000

These individuals must maintain digital records and make quarterly submissions to HMRC. Paper-based record-keeping is no longer acceptable for those in scope.

ISA Changes

The overall ISA annual subscription limit remains at £20,000 for 2026/27. The Lifetime ISA annual contribution limit remains at £4,000 (which counts toward the £20,000 overall limit).

What This Means for Expatriates

For expatriates with UK income sources, the key points to note are:

1. The continued freezing of personal allowances means UK income tax receipts will continue to rise in real terms for those with growing income
2. The reduced CGT annual exempt amount makes UK property disposals and share sales more likely to generate a tax charge
3. MTD for ITSA affects UK landlords regardless of their country of residence, non-resident landlords with UK rental income above £50,000 should prepare for digital record-keeping now
4. The IHT nil rate band freeze compounds the impact of rising property and asset values, the effective IHT burden increases every year the freeze is maintained

Please contact us if you would like to discuss how these changes affect your specific position.