Go back to insightsAre you prepared for April’s tax and pension changes?
The new tax year begins on Monday 6 April (Easter Monday), bringing a range of tax and pension rule changes and many of them are far from favourable.
Dividend tax
From April, dividend tax rates will rise by two percentage points for both basic rate taxpayers (from 8.75% to 10.75%) and higherrate taxpayers (from 33.75% to 35.75%).
The additional rate dividend tax remains at 39.35%, and the £500 dividend allowance is unchanged.
Making Tax Digital (MTD) for income tax
MTD becomes mandatory for selfemployed individuals and landlords whose combined qualifying income from these sources exceeded £50,000 in 2024/25.
Those affected will need to file quarterly digital updates of income and expenses to HMRC using compatible software.
Inheritance tax (IHT) reforms
New rules for agricultural and business relief come into force. Following announcements in the Autumn 2025 Budget and just before Christmas, the 100% relief allowance will become a combined £2,500,000, transferable between spouses and civil partners.
Venture capital trusts (VCTs)
Income tax relief on these higherrisk investments will fall from 30% to 20%. However, eligibility will be broadened, with the size of qualifying companies set to double.
Capital gains tax (CGT)
The CGT rate for gains qualifying for Business Asset Disposal Relief increases from 14% to 18%.
All other CGT rates remain the same, along with the £3,000 annual exemption.
National Insurance contributions (NICs)
From 2026/27 onwards, individuals living or working abroad will no longer be able to pay voluntary Class 2 NICs (£3.65 per week) to build entitlement to the UK State Pension.
Class 3 NICs may still be available, but at a much higher rate of £18.40 per week.
State Pension age (SPA)
The phased increase to a SPA of 67 begins in April 2026:
- If you were born between 6 April 1960 and 5 March 1961, your SPA will rise to between 66 years 1 month and 66 years 11 months.
- If you were born on or after 6 March 1961, your SPA will be at least 67.
If you’d like more detailed guidance on how these changes could impact you, please get in touch.
Tax treatment depends on individual circumstances and may change.
The Financial Conduct Authority does not regulate tax advice.
The value of investments can go down as well as up, and you may get back less than you invested.
Past performance is not a reliable indicator of future returns.
13th March 2026