Tax Changes 2026: key updates for individuals and families

The 2026/27 tax year is now underway. Several tax changes took effect on 6th April 2026 that could affect your personal finances. Some will matter mainly to investors or business owners, while others will be relevant to families, older taxpayers, and people planning for Inheritance Tax. Below is a straightforward summary of the main tax changes 2026 brings for individuals and families.

Dividend tax rates have gone up

The dividend tax-free allowance remains at £500 for 2026/27. However, the rates above that threshold have risen. The basic rate of dividend tax has increased from 8.75% to 10.75%. The higher rate has increased from 33.75% to 35.75%. And finally, the additional rate remains at 39.35%.

For company directors, investors and anyone drawing income from shares outside ISAs and pensions, this means a bigger tax bill on dividend income above the allowance. Combined with frozen income tax thresholds, the increase may justify a fresh review of how your income is structured.

Married Couple’s Allowance has increased

The maximum Married Couple’s Allowance has gone up from £11,270 to £11,700 for 2026/27. Because the relief works as a 10% reduction of the allowance rather than a deduction from income, the maximum tax saving is now £1,170 a year.

The full allowance is available to those with an adjusted net income of up to £39,200. Above that threshold it tapers, but a minimum floor of £4,530 (up from £4,360) makes sure that even higher earners who qualify still receive a tax reduction of at least £453.

The MCA is only available where at least one spouse or civil partner was born before 6th April 1935. It is not the same thing as the widely-known Marriage Allowance, which is available to younger couples. Couples do have some flexibility over how the allowance is divided between them. Where it applies, it is significantly more valuable than the Marriage Allowance and worth claiming – either through your Self-Assessment Tax Return or by getting in touch with HMRC.

Blind Person’s Allowance is slightly higher

The Blind Person’s Allowance has gone up from £3,130 to £3,250 for 2026/27. This comes on top of the standard personal allowance, allowing eligible taxpayers to earn more before income tax becomes payable.

If you can’t fully use the allowance, you can generally transfer the unused amount to a spouse or civil partner.

Qualifying Care Relief has gone up

The annual fixed amount under Qualifying Care Relief has increased from £19,690 to £20,440 for 2026/27, alongside increases to the weekly amounts. This matters to foster carers and shared lives carers using the simplified method to calculate taxable profit.

For those affected, the change increases the level of income that can potentially fall within the tax-free threshold.

Business Asset Disposal Relief and Investor’s Relief are now taxed at 18%

The CGT rate applying to Business Asset Disposal Relief and Investor’s Relief has risen. For qualifying disposals made from 6th April 2026, the rate is now 18% – up from 14% in 2025/26.

This change may be particularly relevant to business owners considering a sale, a share disposal or wider succession planning. The lifetime limit for Business Asset Disposal Relief remains at £1 million. Investor’s Relief is also subject to a £1 million lifetime limit. This was reduced from £10 million for qualifying disposals made on or after 30th October 2024.

Inheritance Tax relief for business and agricultural assets has changed

From 6th April 2026, Agricultural Property Relief and Business Property Relief are no longer effectively uncapped. Under the new rules, up to £2.5 million of qualifying agricultural or business property can benefit from 100% Inheritance Tax relief. Anything above that threshold attracts 50% relief. This creates an effective IHT rate of 20% on the excess.

Unused allowance can be transferred between spouses and civil partners. This potentially allows a couple to pass on up to £5 million of qualifying assets with full relief. AIM-listed shares now attract only 50% business property relief in all cases.

This is one of the most important changes in the current tax year for family businesses, farms and estates. Anyone with significant qualifying assets should review their wills, succession plans and wider estate planning sooner rather than later.

Tax changes 2026 – can we help you?

If you would like to learn what the tax changes 2026 are bringing for you, please get in touch – we’d be delighted to help you with your tax planning.