Many expected the Government to tax wealth heavily and whilst there were certainly a number of measures intended to do this and a lot of rhetoric from Reeves and the front benches, the reality fell short of the expectations.
One of the key changes was an increase to income tax against dividends, property and savings.
From April 2026, the ordinary and upper rates of tax on dividend income will increase by 2 percentage points. The additional rate will remain unchanged.
A year later in April 2027, new separate tax rates for property income will be introduced as follows:
- The property basic rate – 22 per cent
- The property higher rate – 42 per cent
- The property additional rate – 47 per cent
The Government will also increase the tax rate on savings across all bands by 2 percentage points in the same year.
In addition to this change, a new High Value Council Tax Surcharge – already dubbed a ‘mansion tax’ – will be introduced for homes worth more than £2 million.
This will equate to an annual charge for properties worth more than £2 million starting at £2,500, rising to £7,500 for properties worth more than £5 million.