Fifty-plus practical tax-saving moves for the new UK tax year — covering corporation tax, personal tax, property, director remuneration, CGT and IHT. Updated for the April 2026 dividend rate rises and the latest 2026/27 thresholds.
The single biggest tax change for 2026/27 is the dividend rate rise: basic-rate dividend tax has gone from 8.75% to 10.75%, and higher-rate from 33.75% to 35.75%. For director-shareholders drawing £100,000+ in dividends, that’s £2,000+ of additional tax per year. The other major change is MTD ITSA going live from 6 April 2026 for landlords and sole traders with £50,000+ turnover. The 50+ tips below show how to mitigate the dividend rise, prepare for MTD, and unlock the lesser-known reliefs that genuinely move six-figure tax outcomes.
This page is a working reference for the 2026/27 UK tax year — practical moves you can apply between April 2026 and April 2027 to legitimately reduce your tax bill. Each tip is grouped by audience so you can skip to what’s relevant.
The tips are written for UK directors, business owners, landlords and high-earning individuals. Every figure is current as of the 2026/27 tax year. The advice is general — your specific situation may have nuances that change the optimal move, which is why every meaningful tax decision benefits from a conversation with a qualified adviser before you act.
Navigation: Corporation Tax · Personal Tax · Director Remuneration · Property Tax · CGT & IHT · FAQs
Ten corporation tax moves for owner-managed businesses, mid-market companies and Finance Directors. Updated for the 2026/27 thresholds and the widened transfer pricing rules from January 2026.
The £50,000 small profits threshold and £250,000 main rate threshold are divided by the number of associated companies plus the parent. Three associated companies means the small profits band shrinks to ~£16,667 and the marginal band starts there too.
Family-controlled dormant companies and SPVs all count. Review the structure before year-end — closing a dormant entity can recover significant relief.
Profit at £62k? A £12k pension or capex deduction drops you to £50k and avoids the 26.5% marginal band on that slice — saving ~£900 of tax beyond the value of the deduction itself.
Plan equipment purchases, vehicle replacements and major repairs to land in the year where they cross the cliff.
Companies (only — not sole traders or partnerships) get 100% first-year deduction on new plant and machinery with no annual cap. Special rate pool gets a 50% first-year allowance.
Combined with AIA at £1m for second-hand plant, this is genuinely the most generous capital allowance regime in UK history.
When buying second-hand commercial property, a Section 198 election protects your capital allowances claim on fixtures (cabling, plumbing, M&E). Get this signed at completion — once filed, it’s typically permanent.
Without it you may inherit the seller’s zero capital allowances position. On a £2m office this is often a £150,000+ permanent tax loss.
HMRC enquiries on R&D claims rose sharply from 2023. The merged RDEC scheme gives a 20% above-the-line credit; ERIS gives 27% to R&D-intensive loss-making SMEs (30%+ R&D ratio).
Document the technological uncertainty, the competent professional, and the systematic investigation. Over-claims attract penalties; well-documented claims survive enquiry.
A holding company over a trading subsidiary unlocks group relief for losses, Substantial Shareholdings Exemption on disposal of subsidiary shares, and chargeable gains group transfers without CT.
Compliance cost ~£2,000/year extra. Worth it for groups with retained earnings of £500k+, property to separate, or a planned exit within five years.
A 75% subsidiary can surrender current-year trading losses to another 75% subsidiary or to the parent — offsetting against profits in the same accounting period.
Particularly powerful when one trading company is in marginal relief (26.5% effective rate) and another is loss-making. The surrender reduces the receiving company’s effective rate.
Carried-forward losses above the £5m group annual deductions allowance are restricted to offsetting 50% of profit. For most SMEs this never bites — but groups approaching scale should plan loss utilisation around it.
Bring forward income or push deductions out to keep loss usage efficient.
The ‘related persons’ definition has been widened from 1 January 2026, catching more mid-market groups in transfer pricing scope. Cross-border financing and IP arrangements are the highest-risk areas.
Even SMEs exempt from full TP rules can be caught for transactions with certain territories — document intra-group loans and royalties.
Companies with taxable profits above £1.5m pay corporation tax in quarterly instalments rather than 9 months after year-end. Companies above £20m pay ‘very large’ QIPs which start in month 3 of the accounting period.
Cashflow implications are material — model carefully when growth pushes you across thresholds.
Ten personal tax planning moves — managing the 60% trap, pension contributions, allowances, spouse income shifting and MTD ITSA preparation.
Between £100,000 and £125,140 of adjusted net income, you lose £1 of personal allowance for every £2 of income — creating an effective marginal rate of 60%. A £25,140 pension contribution at this level restores the full PA, saving ~£15,000 of tax on a £25k contribution.
The single most lucrative planning move available to UK directors earning at this level.
Each spouse has their own £12,570 PA, £37,700 basic band, £500 dividend allowance and £3,000 CGT exempt amount.
For a couple with one earner on £125k, transferring £30k of dividend income to a non-earning spouse saves ~£8,000+ of tax annually if done through genuine share ownership (Jones v Garnett applies).
Annual allowance is £60,000 (tapered for those with adjusted income above £260,000, minimum £10,000). Unused allowance from the last 3 years can be carried forward.
For 2026/27, individuals at the top end of the higher-rate band can drop into basic rate via pension. Combined with the 60% trap relief, this is the cornerstone of UK personal tax planning.
The dividend allowance is unchanged at £500 — a 0% rate on the first £500 of dividends. Family share structures should ensure each adult shareholder uses this allowance every year.
Modest, but free — over a 20-year working life it’s £5,000+ of tax saved per family member.
If one spouse earns under £12,570 and the other is a basic-rate taxpayer, the lower earner can transfer 10% of their personal allowance (£1,260) to the higher earner — worth up to £252/year.
Claim retrospectively for the last 4 years if eligible.
From 6 April 2026, Making Tax Digital for Income Tax Self Assessment is mandatory for landlords and sole traders with £50,000+ of qualifying income. Threshold drops to £30k in 2027, then £20k in 2028.
Quarterly digital updates plus an End-of-Period Statement plus a Final Declaration. Get bookkeeping software in place by Q1 2026.
Self-assessment payments on account are based on the prior year. If 2026/27 income will be materially lower, file an SA303 to reduce them — preserves cashflow.
Don’t over-reduce: HMRC charges interest at the official rate (currently ~7.75%) if your reduction proves too aggressive.
ISAs (£20k/year) shelter investment growth from CGT and income tax. Pensions (£60k/year annual allowance) shelter contributions from income tax up-front. A high earner should typically fill the pension first (higher relief), then ISAs.
For mid-career savers, splitting between both wraps over a working life builds a flexible mix of tax-protected wealth.
Donations to UK charities are Gift Aided — charity gets the basic-rate uplift, and higher/additional-rate donors reclaim the difference via Self Assessment.
A £10,000 charitable gift costs an additional-rate taxpayer just £5,500 net (after 25% additional-rate relief on the gross amount).
The non-dom regime was abolished from 6 April 2025. New UK residents (after 10+ years non-resident) get a 4-year window where foreign income and gains aren’t taxed.
If you’re returning to the UK after time abroad, structure overseas income realisation around this window — substantial protection in the first 4 tax years.
Ten director-shareholder remuneration optimisations after the April 2026 dividend rate rises — salary structuring, pension contributions, BIK and exit planning.
Without Employment Allowance (which sole-director companies don’t get), £5,000 salary is optimal — matches the Secondary Threshold, no employer NIC, no employee NIC, minimal personal allowance used.
Saves ~£1,000–£1,500/year vs the £12,570 alternative in a sole-director setup.
Multi-director or multi-employee companies (eligible for the £10,500 Employment Allowance) should pay each director the full personal allowance of £12,570.
The CT deduction on the higher salary outweighs the employer NIC, which is largely cancelled by Employment Allowance.
A £20,000 employer pension contribution: 0% personal tax, 0% NIC, deductible against corporation tax. A £20,000 dividend at higher rate: £7,150 personal tax.
Difference of £7,150 per year, plus the pension grows tax-free until drawn. Single biggest remuneration optimisation available to UK directors.
Electric vehicles attract a 4% Benefit-in-Kind rate in 2026/27. A £50k EV costs a higher-rate director just £800 in BIK income tax, plus the company gets 100% Full Expensing on the purchase.
Petrol/diesel equivalents typically carry 30%+ BIK — making the comparison overwhelming for EVs.
A £105k bonus that pushes Adjusted Net Income above £100k can trigger the 60% personal allowance taper, child benefit clawback, and tapered pension allowance.
Salary sacrifice into pension or defer the bonus into the next tax year to manage the cliff.
Overdrawn director loan balances not repaid within 9 months of year-end trigger 33.75% s.455 tax (refundable when repaid). Above £10k, a Beneficial Loan BIK applies.
Either clear DLAs before the 9-month deadline or accept the s.455 charge as deferred. Bed-and-breakfasting rules block repeated short-term clearing.
A spouse performing genuine company work (admin, bookkeeping, marketing) can be paid up to their personal allowance plus a modest amount above, using their own bands.
Must be commensurate with the work — £50,000 for occasional admin will be challenged.
EV salary sacrifice schemes remain tax-efficient (the 2017 OpRA restrictions exempted EVs and pensions).
Cycle-to-work, childcare vouchers (legacy), and ultra-low-emission vehicles all save NIC and income tax.
Selling 51%+ of company shares to an Employee Ownership Trust attracts a 0% CGT rate — full exemption — vs 18% BADR on the first £1m, then 24% above.
Particularly powerful for founders without an obvious buyer, where employees can take over via the trust.
Dividends, salary and pension contributions in the final 24 months before a planned exit can materially affect post-sale wealth.
BADR requires 24 months of qualifying status. Last-year pension contributions are typically the highest-ROI extraction available before sale.
Ten property tax planning moves — Section 24, SDLT, capital allowances on commercial property, VAT option to tax, ATED and the FHL transition.
Mortgage interest restriction means higher-rate landlords pay tax on rental income gross of finance costs, then claim a 20% tax credit. For leveraged portfolios this can push effective tax to 60%+ of net rental profit.
Incorporation can mitigate but triggers SDLT and CGT. Model both routes before deciding — break-even typically sits around £80k-100k rental income for higher-rate taxpayers.
UK residential property disposals must be reported and paid within 60 days of completion. Late filing carries automatic penalties (£100, then daily). The Self Assessment return follows — the 60-day filing is an additional, prepayment-style obligation.
Additional residential property purchases attract a 5% SDLT surcharge (increased from 3% in October 2024). Replacing your main residence within 36 months allows reclaim, but structuring matters — particularly for couples, gifts and inherited property.
Commercial property refurbishments can deliver 30-40% of expenditure into capital allowances pools — main pool (18% WDA), special rate pool (50% FYA for new companies), or SBA (3% on structures).
A £500k office fit-out can produce £150k+ of immediate tax relief if properly apportioned.
OTT is a 20-year commitment that allows input VAT recovery on commercial property costs. Right move if tenants are VAT-registered businesses; wrong move if tenants are mostly VAT-exempt (banks, healthcare, charities).
Get this analysis right pre-completion — revoking is generally only possible in the first 6 months or after 20 years.
Companies owning UK residential property worth £500k+ must file an Annual Tax on Enveloped Dwellings return — even if claiming a relief (genuine rental, development, etc.) that reduces the charge to nil.
The return is due by 30 April each year. Missing filings even with nil tax produce penalties.
The Furnished Holiday Lettings regime was abolished from 6 April 2025. Former FHL properties now follow standard property income rules — no capital allowances on furniture (replacement only), no pension-relevant earnings, no BADR on disposal.
2026/27 returns are the first full year under the new regime — review structuring for affected properties.
Mixed residential/commercial properties pay non-residential SDLT rates (cheaper). HMRC scrutinises claims heavily — a paddock or driveway isn’t commercial use.
Have evidence of genuine non-residential use (planning, lease, actual operation) before claiming the mixed-use rate.
A separate property company (PropCo) holding business premises and renting to the operating company (OpCo) protects the property value from trading risk and unlocks Substantial Shareholdings Exemption on exit.
Don’t restructure mid-stream without modelling SDLT, CGT and BPR consequences first — friction can exceed long-term benefit for smaller assets.
VAT-recovered capital expenditure over £250k on land and buildings is subject to a 10-year adjustment period. Changes in taxable use during this period claw back recovered VAT proportionally.
Plan the use of opted property carefully — a switch to exempt tenants mid-period can trigger six-figure VAT repayments.
Ten Capital Gains Tax and Inheritance Tax moves — BADR, Investors’ Relief, annual exemptions, gifting strategies, BPR changes and pension assets in IHT scope from 2027.
The CGT AEA dropped to £3,000 for 2026/27. Spouses each have their own £3,000.
Spreading disposals across tax years and between spouses can save £600+/year at higher CGT rates. Crystallise gains up to the AEA each year as a baseline.
Business Asset Disposal Relief reduces CGT on qualifying business disposals to 18% (was 10% pre-2025), up to £1m lifetime per individual.
Requires 5%+ shareholding, 24-month qualifying period as employee/officer in a trading company. Spouses each have their own £1m — joint ownership doubles capacity.
Investors’ Relief gives an 18% CGT rate on disposals up to £10m lifetime — 10x BADR. Available to non-employee shareholders of unlisted trading companies, holding ordinary subscribed shares for 3+ years.
Particularly valuable for angel investors, friends-and-family investors and outside directors.
Residential property: 18% basic, 24% higher. Other assets: 18% basic, 24% higher. The rate-aligned regime (October 2024) makes asset class less important to the rate, but holding period and BADR/IR still matter enormously.
NRB: £325,000 (frozen until 2030). RNRB: £175,000 (frozen). Tapered when estate exceeds £2m. Spouses can combine: married couple has up to £1m of NRB+RNRB if they leave a home to direct descendants.
£3,000/year IHT-free gifts (the ‘annual exemption’). Plus £250/person small-gifts. Plus regular gifts out of surplus income (uncapped — must be regular and not affect standard of living).
A couple using these systematically can shift £100,000+ from their estate over a decade without triggering IHT events.
Gifts above the annual exemption are Potentially Exempt Transfers — fall out of the estate if you survive 7 years. Tapered relief between years 3-7.
Start the clock early. A 65-year-old gifting £500k has a strong chance of surviving the 7 years; an 80-year-old far less so.
BPR for IHT now capped at £1m of 100% relief, with assets above getting 50% relief (effective 20% IHT rate). Down from unlimited 100% relief pre-April 2026.
Family trading businesses need to model IHT exposure under the new rules and consider lifetime gifting strategies.
From April 2027, unused defined contribution pension pots are included in the IHT estate. Previously, pensions sat outside IHT entirely.
This changes the optimal drawdown strategy for retirees — burning down DC pension first preserves estate efficiency. Model carefully with a pension adviser.
FICs hold investments inside a corporate wrapper at 25% corporation tax. Used for multi-generational wealth structuring — children can hold shares with diluted voting rights, dividends to fund education, inheritance via share transfers rather than asset gifts.
Set-up cost is real (legal, accounting). Worth it for estates above £3m where IHT exposure is meaningful.
Common questions about the 2026/27 UK tax year, with concise answers optimised for AI search and featured snippets.
These 50 tips are general — your specific position will have nuances that change the optimal move. A Free Discovery Call with Shamim Bhuiyan FCCA CTA covers your priorities and recommends the right sequence to apply them.
Fifty tips is a starting point. A discovery call turns them into a specific plan for your situation — corporation tax, personal tax, property, remuneration, exit. No obligation, no follow-up calls.
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