Are you facing a bigger tax bill from April 2027? If you earn interest on your savings or receive income from renting out property, changes announced in the Autumn Budget could mean you're paying more tax from April 2027. From 6 April 2027, the tax rates applying to savings interest and rental profits will increase by four percentage points. For most taxpayers, that means rates of 24%, 44% and 49%, rather than the current 20%, 40% and 45%. The increases come from two separate announcements: a two-percentage-point rise introduced in the Finance Act 2026, followed by a further two points announced in the October 2026 Budget. The government's reasoning is that income from savings and property doesn't attract National Insurance in the same way as earnings from employment. The changes are intended to narrow that difference. However, for savers and landlords, the practical question is how much extra tax they might pay and whether there's anything they can do about it. What's changing in April 2027? The new rates will apply to savings income across the UK and to property income in England and Northern Ireland. Wales will have powers to vary its property rates, while Scotland has its own arrangements. The income tax bands themselves aren't changing. The personal allowance remains at £12,570 and the higher-rate threshold at £50,270, with both frozen until April 2031. From 6 April 2027, the tax rates on savings and rental income will increase as follows: Basic r ate: From 20% to 24% Higher rate: From 40% to 44% Additional rate: From 45% to 49% These changes represent an increase of four percentage points across all three tax bands. Tax on wages, pensions and trading profits isn't affected by these particular increases. The Treasury expects 84% of income tax payers to be unaffected by the latest rise. Dividend income is treated separately, with the basic and higher dividend tax rates having already increased to 10.75% and 35.75% from April 2026. What does this mean for your savings? Savings income generally includes interest earned on bank and building society accounts, fixed-term deposits, bonds and certain investment funds. The good news is that the existing savings allowances aren't changing. Basic-rate taxpayers can still receive up to £1,000 of interest tax-free each year through the personal savings allowance, while higher-rate taxpayers receive £500. Additional-rate taxpayers don't receive this allowance. There's also the starting rate for savings, which can provide up to £5,000 of tax-free interest for people with relatively low levels of other income. This reduces as other taxable income increases and disappears once income other than savings and dividends reaches £17,570. For example, someone receiving a pension of £16,000 could potentially receive £2,570 of savings interest tax-free, combining the starting rate for savings with their personal savings allowance. A new pension tax allowance between April 2027 and April 2030 will also mean that people over State Pension age whose total income is no more than the full new State Pension will normally pay no income tax. But for those with larger savings balances, the increased rates could make a noticeable difference. How much more could you pay? Let's say you earn £70,000 a year and have £60,000 in a savings account paying 4% interest. That produces £2,400 of annual interest. After deducting your £500 personal savings allowance, £1,900 is taxable. At the current higher rate of 40%, you'd pay £760 in tax. From April 2027, at 44%, that increases to £836. That's an extra £76 a year without any change to your savings or the interest rate. With Bank Rate at 3.75% in September 2026, a higher-rate taxpayer could use up their £500 savings allowance with approximately £13,300 in an account paying that rate. For a basic-rate taxpayer, the equivalent balance would be around £26,700. It's also worth checking when interest is actually paid. Interest is normally taxed when it's paid or credited, so a fixed-term account paying all its interest after 5 April 2027 could fall under the higher rates. Cash ISAs remain an important option One significant announcement in the October Budget was the decision to scrap the planned reduction in the cash ISA allowance. The government had intended to reduce the annual cash ISA limit to £12,000 for under-65s from April 2027, but that proposal has now been reversed. Adults of any age can continue saving up to £20,000 annually in cash ISAs, within the overall ISA allowance, which is frozen until April 2031. Confirming regulations are expected in November 2026. Interest earned within an ISA remains tax-free and doesn't use up your personal savings allowance. Returning to the earlier example, moving £20,000 into a cash ISA paying 4% would shelter £800 of annual interest from tax. For someone paying the new 44% higher rate, that's a saving of £352 a year. Couples can each use their own ISA allowance, potentially sheltering considerably more savings from tax. What about landlords? Landlords who own rental property personally will also face higher tax rates from April 2027. The new rates apply to profits from UK and overseas property, including residential and commercial lettings, property held through partnerships and furnished holiday lets, which have been taxed as ordinary property income since April 2025. Rent-a-room relief remains available on up to £7,500 of gross rental income, while the £1,000 property allowance is unchanged. Losses brought forward can still be used against future property profits. Property income distributions from real estate investment trusts and property funds are also affected. However, rental profits earned through a limited company remain subject to corporation tax rather than the new personal property income rates. Capital gains arising when a property is sold are also taxed separately. Will mortgage interest relief increase too? Yes, although that doesn't necessarily mean landlords will be better off. Individual landlords with residential properties generally can't deduct mortgage interest directly from their rental profits. Instead, they receive a tax reduction at the basic rate. That reduction will increase from 20% to 24% in April 2027, reflecting the new property basic rate. For higher-rate and additional-rate landlords, however, rental profits will be taxed at 44% or 49%, while mortgage interest relief is limited to 24%. Consider a landlord earning £60,000 from employment, with rental profits of £20,000 before mortgage interest of £8,000. Under the current rules, the tax on those profits is £8,000, reduced by £1,600 of mortgage interest relief, leaving £6,400. From April 2027, the tax increases to £8,800, with mortgage interest relief of £1,920, leaving £6,880. That's an additional £480 in tax each year. Even a basic-rate landlord with £12,000 of rental profit and £4,000 of mortgage interest could see their annual tax increase by £320. Your personal allowance could make a difference Another change from April 2027 concerns how your personal allowance is applied. Under the new rules, your personal allowance and other general reliefs must be used against earnings, pensions and trading profits before they can reduce property, savings or dividend income. Property income will also be taxed after other income but before savings and dividends. For someone earning £10,000 from part-time employment and receiving £15,000 in rental profits, the first £10,000 of their personal allowance would cover their salary.  The remaining £2,570 would reduce their rental profits, leaving £12,430 taxable at 24%. That produces a tax bill of £2,983.20, compared with £2,486 under the current 20% rate. If the allowance could still be applied against rental profits first, the new bill would instead be £2,583.20. It's a relatively technical change, but one that could affect people combining modest earnings with rental income. Are the rules different in Scotland and Wales? Savings income will be taxed at the new UK-wide rates of 24%, 44% and 49%. Property income is more complicated. In Scotland, rental profits remain subject to Scottish income tax rates unless the Scottish Parliament uses its new powers to introduce separate property rates. The Scottish Budget for 2027/28 is due on 3 December 2026. In Wales, the new rates provide the starting point, but the Senedd can set its own property income tax rates. The Welsh Government's draft Budget is due on 17 November 2026. Northern Ireland will follow the same property income tax rates as England. Trusts and estates will also be affected. The current 45% and 20% rates applying to different categories of trust and estate income are expected to rise to 49% and 24% respectively, although the detailed legislation has yet to be published. Don't forget Making Tax Digital For landlords and sole traders, April 2027 brings another important change. Those with qualifying income above £30,000 in the 2025/26 tax year will generally need to join Making Tax Digital for Income Tax from 6 April 2027, unless an exemption applies. Importantly, qualifying income means gross rental income and self-employed turnover before expenses, rather than profit. Where a property is jointly owned, only your share of the rental income counts. For example, someone receiving £18,000 in rent and £14,000 from self-employment would have qualifying income of £32,000 and would therefore need to join. HMRC will use 2025/26 tax returns, due by 31 January 2027, to identify those affected, although taxpayers remain responsible for checking their position and signing up even if they don't receive a letter. Making Tax Digital requires compatible software, digital records and quarterly updates to HMRC, alongside filing the annual tax return through the software. The changes affect how income is reported, rather than how much tax is due. Late quarterly updates during 2027/28 won't attract penalty points for those joining that year, although all four updates must still be submitted before the annual return can be filed. The qualifying income threshold is expected to reduce to £20,000 from April 2028. Should landlords consider using a limited company? It's a question that may become more common as personal property income tax rates increase. Companies currently pay corporation tax at rates between 19% and 25%, and mortgage interest can generally be deducted in full. However, transferring personally owned properties into a company isn't necessarily straightforward or tax-efficient. The transfer will normally be treated as a disposal for capital gains tax purposes and a purchase for stamp duty land tax, or the equivalent taxes in Wales and Scotland. Incorporation relief may be available where the lettings activity qualifies as a business, but since April 2026 it must be claimed rather than applying automatically. There's also the cost of refinancing, obtaining lender consent and running the company to consider. And if you want to take profits out personally, dividends are taxed separately at rates of 10.75%, 35.75% or 39.35%. For most landlords, higher personal tax rates alone aren't a sufficient reason to incorporate. However, they may justify reviewing the position, particularly where substantial profits are being reinvested rather than withdrawn. Could sharing income with your spouse help? For married couples and civil partners, reviewing how savings and property are owned may also be worthwhile. Holding savings in the name of the lower-income partner can sometimes make better use of their personal savings allowance and lower tax bands. Jointly owned property is normally taxed on a 50:50 basis between spouses and civil partners. Where ownership is genuinely unequal, it's possible to elect to be taxed according to those shares by submitting Form 17 to HMRC within 60 days. Transfers between spouses and civil partners living together are normally free of capital gains tax, although transferring mortgaged property can create stamp duty liabilities. These arrangements must reflect genuine ownership of the assets, rather than simply redirecting the income. What should you do before April 2027? The 2026/27 tax year is the final year before the higher rates take effect, so there's still an opportunity to review your position. For savers, that might mean making better use of ISA allowances, reviewing when interest is paid or considering how savings are held between spouses. For landlords, it could involve reviewing ownership arrangements, mortgage costs, planned expenditure and whether the current structure remains appropriate. Pension contributions may also be worth considering, as they can extend the basic-rate band and help manage income above £100,000, where the personal allowance starts to reduce. However, rental income doesn't count as relevant earnings for pension tax relief, so landlords without earnings can normally receive relief on only £3,600 of gross contributions annually. It's also important to plan for the cash-flow implications. For many Self Assessment taxpayers, the full effect of the higher rates will appear in the balancing payment due on 31 January 2029. From April 2029, taxpayers making payments on account will move to more regular in-year payments. And if you're approaching the Making Tax Digital threshold, preparing your bookkeeping and software arrangements before April 2027 could save considerable frustration later. Planning ahead makes a difference HMRC previously estimated that around 2.4 million landlords and 3.8 million savers would pay more tax by 2029/30 as a result of the first increase. The further rise announced in October affects the same groups. For some people, the additional tax will be relatively modest. For others, particularly higher-rate landlords with substantial rental profits or savers holding significant amounts outside ISAs, the difference could be considerable. The important thing is not to look at each change in isolation. Savings, property ownership, pensions and other income can all interact, and what looks like a tax saving in one area may create additional costs elsewhere. If you have substantial savings or receive rental income, now is a good time to review your position rather than waiting until the new rates take effect. Get in touch and we can look at what the changes could mean for you.

I was discussing a change in company ownership recently, and the proposed arrangement was straightforward: two people, each owning 50% of the shares. On the face of it, that seems perfectly reasonable. Both people have an equal stake in the business, neither has a controlling shareholding, and everybody knows where they stand. What could be simpler? The interesting part, though, isn't necessarily how the shares are divided. It's whether both people have the same understanding of what owning half the company actually means. Equal shares don't always mean equal contributions When two people decide to go into business together, there's usually a fair amount of enthusiasm involved. They might be friends, relatives or colleagues who've spotted an opportunity. They trust each other, they have plans for the business, and dividing everything equally can seem like the fairest way to start. And sometimes it is. There are plenty of successful businesses with equal shareholders, and I certainly wouldn't suggest that a 50/50 arrangement is inherently a bad idea. But equal ownership doesn't automatically mean equal contributions, equal responsibilities or equal expectations. One person might provide most of the initial funding, while the other contributes experience, contacts or the practical skills needed to run the business. One might work in the company every day, while the other takes a less active role. Perhaps one is responsible for finding customers and the other for delivering the work. None of those arrangements is necessarily unfair, provided both people understand and agree on them. The difficulty comes when those expectations haven't really been discussed. If one shareholder is working long hours while the other is less involved, will they both expect to receive the same amount of money from the company? Should the person doing more of the work receive a salary? What happens if the business needs additional funding and only one shareholder is willing or able to provide it? Those aren't necessarily questions about who owns the shares. They're questions about how the business is going to operate, and the answers won't always be obvious from a 50/50 split. What happens when you disagree? There's also the question of what happens when the shareholders disagree. When both own half the company, neither can necessarily make a decision simply by outvoting the other. That's fine while they agree on everything, but what happens when one wants to expand and the other prefers to keep the business small? Or one wants to reinvest the profits while the other would rather take dividends? Of course, share ownership isn't the only factor in how decisions are made. Directors have their own responsibilities, and the company's articles and any other agreements can affect who has authority to do what. But a genuine disagreement between two equal shareholders can still become a serious problem if there's no agreed way of resolving it. And what if one person wants to leave? Then there's the situation nobody particularly wants to think about when starting a business together: what happens if one person wants to leave? Perhaps they've lost interest, want to retire or have been offered another opportunity. Does the remaining shareholder have the option to buy their shares? How would the shares be valued? What happens if they can't agree on a price, or the remaining shareholder can't afford to buy them? These might seem like rather pessimistic questions to ask when everybody is excited about getting started. But I'd suggest they're much easier to discuss while the relationship is good than after something has gone wrong. This is where a properly considered shareholders' agreement can be valuable. It's something I'd encourage business owners to discuss with a solicitor, alongside making sure the company's articles are appropriate for the arrangement. The intention isn't to anticipate every possible disagreement, but to establish some sensible ground rules while everyone is still in agreement. Getting the financial arrangements right From an accounting perspective, I'm also interested in how the arrangement will work financially. Who is putting money into the business, and on what basis? Is it share capital, a loan or something else? How will the people working in the company be paid? What are the expectations around taking profits out of the business? Those decisions can have accounting and tax consequences, but they also affect the relationship between the owners. A perfectly sensible arrangement can become a source of frustration if one person thought they'd agreed to something different. I think that's the part that sometimes gets overlooked. People can spend a great deal of time discussing the business idea, what they're going to sell and how much money they hope to make, but comparatively little time discussing what each person expects from the other.  And it's not necessarily because they're being careless. When two people trust each other, asking difficult questions about money, responsibilities and what happens if things go wrong can feel unnecessarily awkward. Unfortunately, avoiding an awkward conversation at the beginning doesn't make the underlying questions disappear. A 50/50 split is only the starting point Ultimately, I don't think there's anything wrong with two people owning 50% of a company each. In the right circumstances, it may be exactly the right arrangement. But agreeing that the shares will be split equally is only one part of the decision. It doesn't automatically establish how the business will be managed, how the owners will be rewarded or what happens when their circumstances change. A 50/50 split might be a perfectly good starting point. I'd just want to make sure both people have agreed what comes after it. If you're thinking about starting a business with someone, or changing how your company is owned, get in touch. We can talk through the accounting and tax implications before you make any decisions.