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Finance

UK to raise dividend, property and savings tax rates by 2 percentage points

Published by Global Banking and Finance Review

Posted on November 26, 2025

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LONDON (Reuters) -Britain's government will increase tax rates on dividends, property and savings by 2 percentage-points, finance minister Rachel Reeves said in a budget statement, saying the move would help make the tax system fairer.

Reeves said she was increasing the taxes on some sources of income which are taxed less as they don't have National Insurance social security payments charged on them.

"It’s not fair that the tax system treats different types of income so differently," Reeves said.

"So I will increase the basic and higher rate of tax on property, savings and dividend income by 2 percentage points and the additional rate of tax on property and savings income by 2 percentage points."

Reeves added that even after the reforms, 90% of taxpayers will still pay no tax at all on their savings.

The rate of dividend tax from April next year will increase to 10.75% for the basic rate of tax and to 35.75% for the higher rates of tax, according to a document published on the Office for Budget Responsibility's website.

(Reporting by Andy Bruce and David Milliken. Writing by Andrew MacAskill and Alistair Smout; Editing by Kate Holton)