The headline rates of income tax and Capital Gains Tax haven’t changed. Even so, high earners face higher tax on investment income, expensive homes and the wealth they pass on, and frozen thresholds mean more of their income is taxed each year.

Savings and rental income

From 6 April 2027, income tax on savings interest and rental income rises to 24% for basic-rate, 44% for higher-rate and 49% for additional-rate taxpayers. That’s 4 points higher than today: last year’s Budget set a 2-point rise, and this one adds 2 more. Tax on dividends is unchanged. Shelter what you can: use your £20,000 ISA allowance, which still covers cash, and think about whether some assets would be better held by a spouse or civil partner who pays a lower rate. Transfers between you are usually free of Capital Gains Tax, but take advice first.

Expensive homes

As announced in last year’s Budget, from April 2028, owners of homes in England worth £2 million or more will pay an annual High Value Council Tax Surcharge on top of their council tax. It starts at £2,500 a year for homes valued between £2 million and £2.5 million and rises to £7,500 for homes worth £5 million or more.

Inheritance tax and pensions

For many families, this is the biggest change. From April 2027, most unused pension funds and death benefits will count towards your estate for inheritance tax. This was already set out in law before this Budget. Many people have treated their pension as a tax-efficient way to pass on wealth, but that no longer works in the same way. The £325,000 nil-rate band and the £175,000 residence nil-rate band also stay frozen until 2031, so more estates will have inheritance tax to pay.

Now is a good time to review your will, who you’ve nominated to receive your pension and how much you’re giving away during your lifetime. Regular gifts made out of surplus income can fall outside your estate straight away, but only if they meet strict conditions and you keep clear records.

Business owners and founders

The Chancellor decided against taxing capital gains at income tax rates. However, from 6 April 2027, the lifetime limit for Business Asset Disposal Relief is halved to £500,000. The 18% rate is unchanged, and sales before that date keep the £1 million limit, but don’t bring a sale forward for tax reasons alone. A new Founders’ Relief will charge 10% on up to £10 million of lifetime gains for founders and early investors in fast-growing UK companies, from April 2027. The final rules are still being consulted on.

Frozen thresholds

Income tax thresholds stay frozen until 2031. If you earn between £100,000 and £125,140, you lose your Personal Allowance as your income rises, which works out at an effective 60% tax rate on that slice of income. Paying more into your pension is still one of the most effective ways to bring your taxable income down.

From April 2028, payments for image rights linked to your job will be taxed as employment income.

The bottom line

Leaving your wealth where it is now costs more. Review your estate plan, the way your assets are held and your pension strategy before April 2027.