Tax Changes from April 2027

Making Tax Digital for Income Tax at £30,000

From 6 April 2027 sole traders and landlords whose combined gross self-employment and property income was over £30,000 in 2025/26 must keep digital records and send quarterly updates through compatible software, followed by a final declaration. The threshold falls to £20,000 from April 2028.

Quarterly updates are due by 7 August, 7 November, 7 February and 7 May. Choosing software and moving records over is best done before April, not in the first quarter.

Pensions in Inheritance Tax

From 6 April 2027 most unused pension funds and death benefits will be included in the value of an estate. For many families this is the largest change to Inheritance Tax in a generation, because pensions were often the asset deliberately left untouched.

Review expression-of-wish nominations, the order in which you draw on assets in retirement, and whether lifetime gifting from surplus income now makes sense.

Property and savings income rates

The Finance Act 2026 sets separate rates for property income from April 2027 — 22%, 42% and 47% in England, Wales and Northern Ireland — with relief for finance costs given at the property basic rate. Savings income rates rise by the same two percentage points. The Scottish Government is expected to be able to set its own property income rates.

Landlords should model the effect on net yield, alongside the Section 24 finance cost restriction, before the new year starts.

What stays frozen

The Personal Allowance (£12,570), the rUK higher-rate threshold (£50,270), the additional-rate threshold and the Inheritance Tax nil-rate and residence nil-rate bands are frozen until April 2031. Pay rises therefore pull more income into higher bands each year.