Dividend, Savings and Rental Tax Rates Rise: What It Means for You

Tax Queen

Tax Expert @ Pie

3 min read

What You Need to Know

If you get dividends, savings interest or rent on top of your self-employed income, you will pay more tax on it. How you report it stays the same, so for now you just need to check how much of each type you receive and plan for a bigger bill.

Dividend tax went up on 6 April 2026, so the higher rates already apply in the 2026-27 tax year. Tax rates on savings and property income are due to rise from April 2027. Our guide to budgeting for your Self Assessment tax bill shows how setting a little aside each month can help.

Dividend Tax Is Already Higher This Tax Year

The dividend ordinary rate, which basic rate taxpayers pay, has risen from 8.75% to 10.75%. The upper rate has risen from 33.75% to 35.75%, and the additional rate stays at 39.35%.

The first £500 of dividends you receive each year is still tax-free under the dividend allowance. Our breakdown of UK dividend tax rates for 2026/27 explains how the bands work.

Savings and Property Income From April 2027

Savings Interest

Tax on savings income is due to rise by 2 percentage points in every band from April 2027, to 22%, 42% and 47%. [Editor Note: Unverified figure - check against HMRC guidance] Your Personal Savings Allowance still covers the first slice of interest. It is currently £1,000 for basic rate taxpayers and £500 for higher rate taxpayers.

Rental Income for Landlords

Property income will get its own tax rates, so it will no longer be taxed at the same rates as income from work. From April 2027 the rates are set to be 22% basic, 42% higher and 47% additional. [Editor Note: Unverified figure - check against HMRC guidance]

Under the Section 24 rules, landlords get a tax reduction for mortgage interest and other finance costs. This relief will be given at the new property basic rate of 22%. [Editor Note: Unverified figure - check against HMRC guidance]

The new property rates are set for England and Northern Ireland, and the government plans talks so that Scotland and Wales can set their own. [Editor Note: Source is unclear on whether Wales is included - check against HMRC guidance] You will still report everything using the same steps in our guide on how to file your UK tax return.

Keeping Your Income Types Separate From Now On

Each type of income will soon have its own rates, so it helps to start recording trading profits, rent, interest and dividends separately now. That makes your figures easy to check when your 2026-27 return is due on 31 January 2028.

Pie Tax is self-assessment software for sole traders, freelancers and landlords. It keeps your business income and rental income in one place and sorts your allowable expenses, so you can file with confidence once the new rates start.

If you would like your income sorted correctly before April 2027, you can Try Pie Tax for free and start recording it this week.