Since October 2024 the tax changes have landed in waves, and several bite for the first time in 2026/27. The ones with the widest reach: employer National Insurance at 15% from a £5,000 threshold, capital gains at 18% and 24%, business and agricultural relief capped at £2.5 million, and unused pension funds brought into the estate.
Employer National Insurance
The change with the broadest effect on business is not a rate on profits. Employer secondary Class 1 is 15%, charged above a secondary threshold of £5,000 a year — down from the far higher threshold that applied before.
That structural change costs more than a percentage point increase would, and it costs most where wages are lowest. A business employing twenty people at modest salaries pays employer NIC on almost the whole payroll. The Employment Allowance at £10,500 offsets part of it — but it must be claimed every year and does not roll forward.
Capital gains tax
The main rates rose to 18% and 24% on 30 October 2024. The detail people miss is that this removed the separate residential property rate: the general rates were raised to the residential ones, so there is now a single pair of rates for individuals, and 24% for trustees and personal representatives.
Business asset disposal relief then climbed in steps — 10%, to 14% for disposals from 6 April 2025, and to 18% from 6 April 2026. The lifetime limit stays at £1 million. Investors' relief followed the same rate path but had its lifetime limit cut from £10 million to £1 million.
The annual exempt amount remains £3,000, and £1,500 for most trustees. Our guide to capital gains tax changes sets out the dates in full.
Inheritance tax: two significant changes
Business and agricultural relief. For deaths on or after 6 April 2026, 100% relief is capped at £2.5 million of combined qualifying property, with anything above that relieved at 50%. The allowance is transferable between spouses, taking the potential combined figure to £5 million.
Two things to note, because a great deal of published commentary is out of date. The allowance was announced at £1 million and increased to £2.5 million in December 2025 — and the original announcement said it would not be transferable. Both points changed. Separately, AIM and other unquoted shares now attract 50% relief only and are not relevant to the 100% allowance at all.
Pensions. Unused pension funds and death benefits are being brought within the estate for inheritance tax, with personal representatives liable. For anyone whose estate plan assumed a pension sat outside the estate — which was the standard planning position — that assumption no longer holds. Our guide to inheritance tax on pensions covers the mechanics.
Non-domiciled individuals
Domicile stopped being the organising idea on 6 April 2025. In its place:
- The FIG regime — four years of relief on foreign income and gains for someone arriving after at least ten consecutive non-resident years, at the cost of the personal allowance and the CGT annual exempt amount;
- Inheritance tax on a residence test — a long-term UK resident is someone resident for at least 10 of the last 20 tax years, with a tail of 3 to 10 years after leaving;
- Offshore trust protections repealed, so income and gains arising from 6 April 2025 are taxed on a UK-resident settlor, and excluded property status is retested at every chargeable event rather than fixed when assets were settled;
- The temporary repatriation facility — 12% for 2025/26 and 2026/27, rising to 15% for 2027/28 before closing on 5 April 2028.
Our guides to the FIG regime and offshore trusts cover these.
Carried interest and employee ownership
Two targeted changes worth knowing if you advise on exits.
Carried interest left the capital gains code on 6 April 2026. It is now treated as the profit of a deemed trade, subject to income tax and Class 4 National Insurance, with a 72.5% multiplier on the qualifying part — where qualification depends on the fund's average holding period, reaching 100% only at 40 months.
Employee ownership trusts lost half their relief on 26 November 2025: only 50% of the gain is now exempt. And claiming that relief blocks business asset disposal relief and investors' relief on the same disposal, which changes the comparison against a trade sale considerably. Our guide to EOT disadvantages works through it.
VAT and indirect tax
Private school fees became standard-rated at 20% from 1 January 2025 — the single most visible VAT change of the period.
Two temporary reliefs ran the other way in 2026: a 5% rate on children's meals and family attractions over the summer, now ended, and a zero rate on domestic electricity in Great Britain from 1 October 2026 to 31 March 2027. Both are time-limited, and the electricity relief does not extend to Northern Ireland. See our guide to the VAT cuts.
Business tax
Corporation tax rates were left alone — 25% main rate and 19% small profits rate, confirmed again for the year beginning April 2027. What changed was capital allowances: the main pool writing down allowance fell from 18% to 14% from 1 April 2026, with a hybrid rate for straddling periods, while the special rate pool stayed at 6%.
Against that, a new 40% first-year allowance arrived for main-rate expenditure incurred from 1 January 2026, aimed at cases where full expensing and the annual investment allowance do not reach — including unincorporated businesses and assets bought for leasing. Full expensing itself was made permanent.
In energy, the Energy Profits Levy sits at 38%, taking the headline North Sea rate to 78%, with the investment allowance abolished and a successor levy drafted for 2030. The Electricity Generator Levy rose to 55% for electricity generated from 1 July 2026.
What to act on
Three things carry real deadlines. Estate plans built on full business relief or on pensions sitting outside the estate need revisiting now rather than later. Any EOT or exit modelled before November 2025 uses the wrong relief and the wrong comparison. And for anyone with pre-April-2025 offshore income, the temporary repatriation facility is at 12% this year and 15% next.
Acumon advises businesses and families on the practical consequences of these changes through tax planning, inheritance tax planning and business tax work, with succession planning where the structure needs rebuilding. If your estate plan predates December 2025, the business relief figure in it is wrong in your favour — and worth correcting deliberately.