Tax
The Autumn Budgets: Timeline
The Autumn Budgets in 2024 and 2025 brought about significant changes to our tax system. To help you navigate these shifts, we’ve created a clear timeline of key dates and updates.
Scroll down to learn more.
[Page last reviewed April 2026]
CGT raised:
18% - Basic
24% - Higher/Additional
2024
October
Stamp Duty on 2nd homes: 5%
VAT applies on private school fees
Try our School Fees Calculator
2025
January
April
State Pension rises by 4.1%
Try our Retirement Income tool
Inheritance Tax on combined Agricultural and ‘asset backed’ Business Property exceeding £2.5m
and
Inheritance Tax on AIM listed shares at 20%
Additional 2% tax on Dividend income
2026
April
Pensions liable to Inheritance Tax
Additional 2% tax on savings and property income
Cash ISA allowance reduces to £12,000 for under 65s
2027
April
Oct 2024 The main rates of Capital Gains Tax (CGT) increased from 10% and 20% to 18% and 24%, respectively, for disposals made on or after 30th October 2024.
Jan 2025 From 1st January 2025, the standard 20% VAT rate applies to private school fees.
Apr 2025 The full new state pension increased from £221.20 to £230.30 per week (£11,975 per year), while the full old basic state pension increased from £169.50 to £176.45 per week (£9,175 per year).
Apr 2026 From 6th April 2026, agricultural and ‘asset backed’ business property exceeding £2.5m per person faces reduced relief rates, with the excess potentially subject to Inheritance Tax (IHT) at 20%. IHT on shares listed on the Alternative Investment Market (AIM) increased to 20%, up from zero.
Apr 2027 From 6th April 2027, any unused pension funds and death benefits payable from a pension will be subject to Inheritance Tax.
Frozen until 2031 Income Tax, National Insurance thresholds and Nil Rate Bands for Inheritance Tax.
The £40bn tax raise
Read our market updates to learn what the 2024 and 2025 Autumn Budgets mean for investors.
Tax on investments
Tax on investment accounts has changed.
Knowing which investment accounts benefit from tax relief and what allowances might be available to you can mean the difference between tens of thousands of pounds of tax.
At Montgomery Associates, we have always placed an ongoing emphasis on tax efficiency. As a result of using clients’ tax-free ISAs and pension allowances each year, today nearly three quarters of all the money we invest is in tax-efficient accounts.
As an investment manager, to ensure a portfolio remains adequately diversified and in line with a target risk profile, realising capital gains at some point is likely to become unavoidable. This could be the case whether the gains are reinvested or distributed as income.
On this page we address the following:
Capital Gains Tax on investment portfolios
Income Tax on dividends and interest
[Page last reviewed April 2025]
Capital Gains Tax
In the Autumn Budget 2024, it was announced that Capital Gains Tax (CGT) - the tax you pay on the disposal of an asset that has increased in value - changed. The Basic rate rose from 10% to 18%, and the Higher/Additional rate rose from 20% to 24%. These new rates have applied to disposals made on or after 30th October 2024.
For the current tax year, the CGT-free allowance (the annual exempt amount on which no tax is paid on gains) is set at £3,000 under the current rules. This followed a reduction from £12,300 to £6,000 three years ago. The bar chart below illustrates this decline.
This means that any gains above this threshold are taxed at either the new 18% Basic rate or the 24% Higher/Additional rate, depending on your total taxable income.
Gains on investments from now on enjoy less in the way of tax-free allowances. As an investor, the likelihood is that investment accounts other than ISAs and pensions are subject to tax on profits which might otherwise have fallen within a tax-free allowance in the past.
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Since 5th April 2024, the CGT allowance has remained at £3,000 - down from £6,000 the previous year. Your self-assessment for the 2023/24 tax year would have been due in January 2025, and as a result of the lower allowance, you may have owed more capital gains tax than in previous years.
The £3,000 CGT allowance remains in place for the 2025/26 tax year with the deadline to submit your self-assessment and settle any tax owed falling on 31st January 2026.
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The changes to CGT rates, announced in the Autumn Budget 2024 apply to disposals made on or after 30 October 2024.
If the gains in your General Investment Account (GIA) exceed the £3,000 allowance, any amount over this is subject to CGT at 18% (Basic rate) or 24% (Higher/Additional rate).
For example, if you are a higher-rate taxpayer and gains within your GIA amount to £10,000, you will have exceeded the allowance by £7,000, meaning you will owe £1,680 in CGT.
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No. One of the biggest advantages of an Individual Savings Account (ISA) is that anything within it is permitted to grow free of capital gains tax and any dividends are also free of income tax. If you have a Cash ISA, the interest you earn within it is tax free. If you have a Stocks & Shares ISA, the profits you might make on shares or funds you buy and sell within it are tax free. Dividends paid within an ISA are also tax-free. Buying and selling investments within an ISA are therefore extremely tax efficient.
You can save up to £20,000 into an ISA each tax year, and if you make a withdrawal, the Flexible ISA rules introduced in 2016 allow you to return the withdrawn amount within the same tax year without losing any of your annual allowance, as long as it is a flexible ISA.
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With the CGT allowance reducing year-on-year, if you hold investments outside of an ISA or pension then there is an increasing chance your account will be subject to some degree of CGT either this year or next.
You may be able to offset gains with losses, either by securing additional investment sales during the tax year or by carrying forward losses from previous tax years. You should check the position with your accountant and be sure to register any historical losses with HMRC so these can be utilised in future tax years to offset any gains.
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Not necessarily, however you may now need to submit a tax return and declare a CGT liability either yourself or with the help of an accountant now the CGT allowance has reduced. If you would like an introduction to an accountant please contact us.
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Any unrealised gains that have accumulated during your lifetime are reset at the date of death and are therefore free of CGT.
How has the CGT allowance changed over the years?
Dividends
With tax-free allowances under pressure, you might not be surprised to learn that the Dividend Allowance has reduced in recent years too. The current tax-free Dividend Allowance stands at £500 (2026/27 tax year) - down from £1,000 (2023/24 tax year), £2,000 (2022/23 tax year) and down from as much as £5,000 in 2017/18.
The tax applicable to Dividends over this allowance is subject to 8.75% (Basic rate), 33.75% (Higher rate) and 39.35% (Additional rate).
Interest on Savings
Since the rise of interest rates in 2022, savers have started to attract more meaningful returns on their cash savings. However, for the first time in years this interest on cash savings may need to be declared via self assessment.
If your income is within the Personal Allowance of £12,570 then you can receive interest of up to £5,000 and pay no tax on it - this is called the ‘starting rate’. If your income exceeds the Personal Allowance, then this tax-free interest allowance quickly erodes until income exceeding £17,570 attracts no tax-free starting rate allowance at all.
In addition to this, you may also receive a £1,000 Personal Savings Allowance if you are a Basic rate taxpayer, or £500 Allowance if you are a Higher rate taxpayer.
How are my investment accounts affected by tax?
* Withdrawals themselves do not trigger a tax liability, but dividends and/or selling investments may do.
Contact us
Montgomery Associates are not tax advisers and you should seek professional advice from an accountant for tax matters relating to your personal circumstances.
Information and examples on this page are correct as at the time of publishing and may be subject to change.