Understanding the April 2026 Threshold Changes
From 6 April 2026, the UK government is implementing several key tax changes that affect:
- Income Tax: personal allowances and higher rate thresholds (non-savings, non-dividend income) will change. (gov.uk)
- Capital Gains Tax: particularly for individuals and carried interest. BadR (Business Asset Disposal Relief) and Investors’ Relief will be adjusted to match the main lower rate at 18%. (gov.uk)
- Inheritance Tax (IHT) reliefs: agricultural property and business property reliefs will also be reformed, especially combined allowances and transferrable unused reliefs. (gov.uk)
Actionable Planning Strategies
1. Accelerate Gains and Disposals
- Individuals anticipating large capital gains might consider disposing before 6 April 2026, when rates on reliefs increase. For example, gains eligible for Investors’ Relief will rise from current rate up to 18% from that date. Timing matters. (gov.uk)
2. Use IHT Reliefs Wisely
- For those with agricultural or business property, make use of the £1 million combined 100% relief allowance before the 50% taper takes effect beyond that. Consider transferring ownership between spouses/civil partners to maximize benefits. (gov.uk)
3. Assess Ownership & Residency for Non-UK Domiciled Individuals
- For newcomers or returnees, review eligibility for the Foreign Income & Gains (FIG) regime. If you’ll be UK tax-resident from 6 April 2025 and meet the non-UK residence criteria, your foreign income and gains may be exempt initially. Plan migration of assets accordingly. (gov.uk)
4. Salary Sacrifice & Pension Contributions
- The government plans to apply NICs (National Insurance Contributions) on pension contributions above £2,000 via salary sacrifice, from 6 April 2026/2027. Review how this may affect your structure and evaluate whether increasing contributions early offers better net benefit. (gov.uk)
Real-World Example
Meet Jane, a UK resident with £200,000 of non-savings income and £500,000 in agricultural land. Under the new rules, the first £1 million in agricultural/business property will still attract 100% relief, but anything beyond faces 50%. She could transfer a portion to her spouse before 6 April 2026 to utilize both allowances fully and avoid higher rates.
Meanwhile, she anticipates £150,000 capital gains through sale of shares. Disposing before 6 April ensures she accesses current lower relief rates, and using ISA or pension growth where possible to shelter gains.
Key Takeaways
- Act now, before April 6th, for any gains disposal or ownership restructure.
- Use spousal transfers where possible to maximize reliefs.
- Non-UK domiciliaries should assess the new FIG regime eligibility.
- Review pension and salary sacrifice arrangements ahead of tightening thresholds.
- Stay informed via HMRC guidance and consult a tax professional for your specific situation.
Benefit from these changes by moving early and structuring assets, income sources, and reliefs optimally ahead of April 2026.