The annual Capital Gains Tax (CGT) exemption remains at £3,000 for both the 2025/26 and 2026/27 tax years. Chargeable gains within this allowance will not give rise to a CGT liability.

The main CGT rates are as follows:

Before taking any action, it is important to consider your wider tax position and circumstances. If you are considering accelerating a disposal to take advantage of current rates, please contact us and we can help assess the potential benefits.

Carried Interest

For the 2025/26 tax year, qualifying carried interest continues to be taxed within the Capital Gains Tax regime at a rate of 32%.

However, from 6 April 2026, carried interest will move into the Income Tax regime and will also be subject to National Insurance contributions.

Qualifying carried interest will benefit from a 72.5% multiplier, meaning only 72.5% of the gain will be subject to Income Tax. For an additional rate taxpayer, this results in an effective tax rate of approximately 34.1%.

Whilst the effective rate is reduced by the multiplier, the underlying tax treatment will be based on 45% Income Tax together with 2% Class 4 National Insurance contributions.

The Personal Allowance, Capital Gains Tax Annual Exempt Amount and Dividend Allowance remain unchanged for the 2026/27 tax year. The Income Tax bands also remain frozen.

However, there are changes to the taxation of dividends and, from the 2027/28 tax year, new standalone Property Tax Rates and Savings Tax Rates will apply.

Individuals receiving rental income should be aware that, from 2027/28, property income will be taxed using the new Property Tax Rates rather than the standard Income Tax rates.

The current allowances and tax rates are shown below.

*Income above £100,000 may result in the Personal Allowance being tapered

Tax Rates – 2025/26

Tax Rates – 2026/27

New ISA Rules from April 2027: What Savers Need to Know

The Government has announced changes to the way Individual Savings Accounts (ISAs) can be funded from 6 April 2027.

Whilst the overall annual ISA allowance will remain unchanged at £20,000, new limits will apply to how much can be invested into Cash ISAs.

For many savers, the changes may influence how they choose to structure their ISA savings in the future.

What’s Changing?

From 6 April 2027, individuals under the age of 65 will be able to invest:

• Up to £12,000 into Cash ISAs each tax year.
• Up to £8,000 into Stocks & Shares ISAs.

The combined ISA allowance will remain at £20,000 per tax year and has been frozen until 2030.

These new limits only apply to contributions made from 6 April 2027 onwards.

Why Are the Rules Changing?

The Government hopes the changes will encourage more people to invest for the longer term rather than holding all of their ISA savings in cash.

By increasing investment into Stocks & Shares ISAs, the aim is to help individuals achieve stronger long-term returns while supporting investment into UK businesses and financial markets.

What Does This Mean for Savers?

If you currently save solely into a Cash ISA, you may need to review your savings strategy from April 2027.

Many people value Cash ISAs because they offer certainty and easy access to savings. However, under the new rules, anyone wishing to use their full ISA allowance may need to consider investing part of their annual contribution into a Stocks & Shares ISA.  Whether this is appropriate will depend on your individual circumstances, attitude to investment risk and financial objectives.

Do You Need to Take Any Action Now?

There is no immediate action required, as the changes do not come into effect until 6 April 2027.  However, if you regularly maximise your ISA allowance each year, it may be worthwhile reviewing your plans ahead of the changes to understand how they could affect your future saving strategy.

Need Advice?

ISAs continue to offer valuable tax advantages and remain an important part of many people’s financial planning.

If you would like to understand how the new rules may affect you, or discuss the most suitable approach based on your circumstances, our team would be happy to help.

As of 28 January, a significant change to the filing requirements for small companies and micro entities has been confirmed by Companies House. The much anticipated obligation for these businesses to submit their profit and loss accounts to Companies House will no longer take effect in April 2027, following stakeholder concerns.

The decision to pause the implementation of these changes was revealed in an update to the guidance on GOV.UK. The update states: “Changes to accounts filing will not be introduced in April 2027. The reforms are still under review, and a final decision will be announced shortly. Companies will receive at least 21 months’ notice to prepare.”

This marks a significant shift for small businesses, who were initially expecting to submit profit and loss accounts to Companies House as part of the Economic Crime and Corporate Transparency Act. The timeline for these changes is now uncertain, but the good news for businesses is that they will have ample time to prepare for any future changes, with at least 21 months’ notice before implementation.

Why the change?

Companies House has not issued a formal statement on the delay, but the reasoning behind the pause is due to stakeholder feedback raising concerns over the balance between improving corporate transparency and preventing undue burdens on businesses. The proposed reforms, while aimed at tackling economic crime and increasing financial transparency, were seen by some as a potential challenge for small companies and micro entities.

What were the original proposals?

Under the initial proposals, small companies and micro entities were set to face new requirements as follows:

• Micro entities: These companies would have been required to file their balance sheet and profit and loss account. However, there would have been no need for a directors’ report.
• Small companies: These businesses would have been required to submit a balance sheet, directors’ report, auditor’s report (unless exempt), and their profit and loss account.

These proposals were part of broader powers granted by the Economic Crime and Corporate Transparency Act, which seeks to improve corporate transparency and address issues related to economic crime. While the intentions behind these measures were positive, the feedback from businesses and stakeholders has caused a pause in the implementation timeline.

What’s next?

With the final decision on these reforms still under review, businesses can breathe a sigh of relief for now. The 21 months’ notice period ensures that there will be plenty of time for companies to adjust to any future filing changes once a final decision is made.

This development highlights the importance of staying informed about ongoing changes to corporate reporting requirements, especially for small businesses who may face new challenges or opportunities depending on the outcome. Keep an eye out for further updates, and as always, feel free to contact us with any questions on how these changes might affect your business.

If you are a married couple or civil partners who own rental property jointly, you may benefit from a Form 17 declaration of beneficial ownership. This allows you to declare unequal ownership of your property for income tax purposes, helping to ensure that your tax liabilities reflect your actual share of income.

What is Form 17?

Form 17 is an HMRC document that lets couples declare that they own property in unequal shares. To complete it, you must also have a solicitor prepare a declaration of trust. This legal document sets out the precise ownership proportions.

The declaration of trust must be submitted with Form 17. Without it, HMRC will not accept your application as they require legal proof of the agreed ownership split.

Why Make a Form 17 Declaration?

By making a Form 17 declaration of beneficial ownership, couples are taxed on their actual share of rental income rather than the default 50/50 split.

This can reduce the overall tax burden, especially where one partner is a higher rate taxpayer and the other pays at the basic rate. By reallocating income, you may be able to ensure that more of your property income is taxed at the lower rate.

Impact on Capital Gains Tax

The ownership split you declare on Form 17 also applies to capital gains tax (CGT). When you sell the property, you will each be taxed on your declared share of any gain.

This may further reduce your overall tax liability, as one of you may qualify for the lower CGT rate depending on your income level and available allowances.

Professional Advice is Essential

Property ownership and tax planning are complex areas, and any declaration must be considered carefully. You should always seek advice from both a solicitor and a tax adviser before submitting a Form 17 declaration of beneficial ownership.

At Lewis Brownlee, we help clients across the South Coast of the UK with tax planning and compliance. Our experienced team of Chartered Accountants and Tax Advisers can guide you through beneficial ownership, HMRC requirements, and how to structure your property income efficiently.

If you are considering making a declaration, contact us today to ensure you get the right advice and avoid costly mistakes.