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- UK Tax Guide 2025/26
Complete UK Tax Guide 2025/26
Capital Gains Tax, Dividends & Self Assessment
SA108, SA100 - CGT (18%/24%), Section 104 Pooling, ISA/SIPP Tax Wrappers
KEY CHANGES FOR 2024/25, 2025/26 & 2026/27
CGT RATE INCREASE (October 2024)
From 30 October 2024, CGT rates increased from 10%/20% to 18%/24%. The 2024-25 tax year is a split year - use SA108 Box 51 for the rate difference on disposals after 30 October.
CGT ALLOWANCE REDUCED
The CGT annual exempt amount dropped from 6,000 (2023/24) to 3,000 (2024/25 onwards). This was previously 12,300 before 2022/23.
DIVIDEND ALLOWANCE HALVED
Dividend allowance reduced from 1,000 (2023/24) to 500 (2024/25 onwards).
DIVIDEND RATES UP FROM 6 APRIL 2026 (Budget 2025)
At Budget 2025 (26 November 2025) the dividend ordinary rate rose from 8.75% to 10.75% and the upper rate from 33.75% to 35.75%, both from 6 April 2026. The additional rate is unchanged at 39.35%. This affects the 2026/27 tax year, not 2025/26.
SAVINGS & PROPERTY RATES UP FROM 6 APRIL 2027
Also announced at Budget 2025: savings income rates rise to 22% / 42% / 47% and property income gets its own 22% / 42% / 47% scale, both from 6 April 2027 (tax year 2027/28). Interest from brokers and P2P platforms is savings income, so this is the one to plan for next.
UNCHANGED AT BUDGET 2025
No change to CGT rates (18%/24% continue through 2026/27), the CGT annual exempt amount (3,000, permanently fixed from 2024/25), the dividend allowance (500) or the Personal Savings Allowance (1,000 basic / 500 higher / nil additional).
Why UK Investment Taxes Feel Complicated
- - Split-year CGT rates: 2024/25 spans two rate sets with Box 51 adjustment
- - Share matching rules: Same-day, 30-day, Section 104 (not FIFO)
- - Foreign income reporting: SA106 required when foreign dividends exceed £500, untaxed foreign interest exceeds £2,000, interest had foreign tax taken off, or you claim Foreign Tax Credit Relief (2025/26 return)
- - ISA/SIPP exclusions: Mixed accounts make tracking taxable vs tax-free hard
- - Multiple brokers: Reconciling trades, FX, and dividends across sources
What Tax-Wizard Does For You
✅ Automated calculations
- Section 104 pooling with same-day and 30-day rules
- CGT split-year handling with Box 51 adjustment
- Dividends + foreign withholding tax tracking
- ISA/SIPP exclusion and warning detection
📄 HMRC-ready reports
- SA108 (Capital Gains) box mapping
- SA100 (Dividends/Interest) mapping
- SA106 foreign income breakdowns
- Bed & Breakfast event summaries
Capital Gains Tax (SA108)
CGT Rates 2025/26
| Taxpayer Status | Rate | Income Threshold |
|---|---|---|
| Basic rate taxpayer | 18% | Up to 50,270 taxable income |
| Higher/additional rate taxpayer | 24% | Over 50,270 taxable income |
| Annual Exempt Amount | 3,000 | Tax-free allowance |
2024-25 Split Year Warning
For the 2024-25 tax year, disposals before 30 October 2024 are taxed at 10%/20%, while disposals on or after 30 October 2024 are taxed at 18%/24%. Use SA108 Box 51 to record the additional tax due.
What's Chargeable to CGT
Taxable Assets:
- Stocks and shares (outside ISA/SIPP)
- ETFs (reporting fund status)
- CFDs
- Futures contracts
- Options (traded and non-traded)
- Cryptocurrency
- Non-qualifying corporate bonds
CGT Exempt:
- UK Government Gilts
- T-Bills
- Qualifying Corporate Bonds (QCBs)
- ISA holdings
- SIPP/pension holdings
- Spread betting
SA108 Key Boxes
- Boxes 13.1-13.8: Cryptoassets (from 2024-25)
- Boxes 23-30: Listed shares and securities
- Boxes 31-38: Unlisted shares and securities
- Boxes 14-22: Other assets (incl. business assets)
- Box 51: Additional CGT due (2024-25 rate change)
Dividend Tax (SA100)
Dividend Tax Rates 2025/26
These are the 2025/26 rates. For 2026/27 the ordinary and upper rates are 2 points higher - see the table directly below this one.
| Tax Band | Rate | Income Threshold |
|---|---|---|
| Basic rate | 8.75% | Up to 50,270 |
| Higher rate | 33.75% | 50,271 - 125,140 |
| Additional rate | 39.35% | Over 125,140 |
| Dividend Allowance | 500 | Tax-free |
Dividend Tax Rates 2026/27 (from 6 April 2026)
| Tax Band | Rate | Was (2025/26) |
|---|---|---|
| Basic rate (ordinary rate) | 10.75% | 8.75% |
| Higher rate (upper rate) | 35.75% | 33.75% |
| Additional rate | 39.35% | 39.35% |
| Dividend Allowance | 500 | 500 |
Source: Budget 2025 (26 November 2025), "Changes to tax rates for property, savings and dividend income". The change applies to dividends received on or after 6 April 2026, so it lands on the 2026/27 return due 31 January 2028.
Foreign Dividend Withholding
Foreign dividends may have withholding tax applied at source. You can usually claim credit for this:
- USA: 15% (with W-8BEN) - full credit available
- Ireland: 25% - up to 15% creditable
- Germany: 26.375% - up to 15% creditable
"Return of Capital" Payouts (STRC, SATA & Other US Shares)
Some US companies, such as Strategy (STRC, STRK, STRF, STRD preferreds) and Strive (SATA), pay distributions that IBKR and Trading 212 label "return of capital", Degiro labels "Capital Return" and Trade Republic labels "Capital Distribution". The issuers report them as 100% return of capital on IRS Form 8937 because they have no "earnings and profits". That is a US federal tax label only, and HMRC does not follow it.
UK law asks how the company paid the money under its own company law and whether your shareholding is left intact, not what the payment is called (HMRC's SAIM5210; Beard v HMRC [2025] EWCA Civ 385, which held distributions made through the ordinary dividend procedure to be income even though they came out of share premium). STRC and SATA payouts are ordinary board-declared dividends under Delaware (Strategy) and Nevada (Strive) company law, with no reduction of share capital, so they are most likely dividends of a non-UK resident company taxed as income under ITTOIA 2005 s.402. Report them as foreign dividends on the SA106 Foreign pages (or SA100 box 6 if foreign dividends of £500 or less, plus untaxed foreign interest of up to £2,000, are your only foreign income and you claim no Foreign Tax Credit Relief; foreign tax taken off then goes in box 7). They share the £500 dividend allowance with your other dividends and are then taxed at the dividend rates for the tax year above. They do not reduce your Section 104 pool cost.
TCGA 1992 s.122 applies only to genuine capital distributions that are not income, such as a liquidation payout or a formal reduction of share capital. A "small" one (in HMRC practice 5% or less of the holding's value, or £3,000 or less) is not a disposal; it is deducted from the cost of your Section 104 pool instead. We have found no HMRC guidance naming STRC or SATA, so treat this as the most likely reading rather than a ruling. Holding these shares in an ISA or SIPP avoids the question; check with your provider whether they are eligible.
How Tax-Wizard handles it
In Calculation Settings on the dashboard, the setting Payments your broker calls "return of capital" defaults to Tax as dividend income (recommended). Every payout your broker labels "return of capital", whatever the issuer (e.g. STRC US5949728530 or SATA US8629452017), is booked as an ordinary dividend and appears in your dividend figures; your Section 104 pool cost stays unchanged.
Only if you have documentation of a genuine capital repayment, pick Accept return of capital: lower the purchase price (only with proof): the payout is then left out of your dividend income and deducted from the cost of your Section 104 pool on the payment date (TCGA 1992 s.122(2), HMRC CG57835), so it lowers the allowable cost on your later disposals; any part above the pool cost is reported as a gain in the year it is paid.
Tax-Free Investments
Tax Wrappers
| Wrapper | Annual Limit | Tax Treatment |
|---|---|---|
| ISA (Stocks & Shares) | 20,000 | No CGT, no dividend tax, no income tax |
| SIPP / Pension | 60,000* | Tax relief on contributions, tax-free growth |
| Lifetime ISA | 4,000 | 25% bonus, age 18-39 to open |
*Annual pension allowance; may be reduced for high earners
CGT-Exempt Assets
Fully Exempt:
- UK Government Gilts
- Treasury Bills (T-Bills)
- Qualifying Corporate Bonds
- Premium Bonds
- National Savings products
Spread Betting:
Spread betting profits are tax-free as they're classified as gambling. However, losses cannot offset other gains.
Cryptocurrency
Crypto Tax Treatment
HMRC treats cryptocurrency as property, not currency. The same CGT rules apply:
| Event | Tax Treatment |
|---|---|
| Selling crypto for GBP/fiat | CGT on gain |
| Swapping crypto for crypto | CGT on gain (disposal of first crypto) |
| Using crypto to buy goods/services | CGT on gain at point of spending |
| Mining income | Income tax (miscellaneous income) |
| Staking rewards | Income tax when received |
| Airdrops | Income tax if received for services |
Crypto Share Matching
The same UK share matching rules apply to crypto: Same-day → 30-day B&B → Pool. Each cryptocurrency (BTC, ETH, etc.) is tracked as a separate asset class.
P2P / Crowdfunding Interest (SA106)
EU P2P platforms (Mintos, Bondora, PeerBerry, etc.) do not withhold UK tax. UK residents declare gross interest on SA106 page F2 (Interest and other income from overseas savings) and may claim Foreign Tax Credit Relief (HS263) for any source-country withholding under the relevant DTT.
A strict application of HMRC's source-of-interest test (SAIM9090; Ardmore Construction Ltd v HMRC [2018] EWCA 1438) would attribute interest to the underlying borrower's country. In practice, UK practitioners enter the platform's country of incorporation - the party paying the interest, the entity HMRC can verify against, and the only basis on which Foreign Tax Credit Relief can be claimed where withholding applies (Mintos / ViaInvest withhold 5% Latvian PIT on EU/EEA residents).
| Platform | SA106 country | Source-country WHT | Source |
|---|---|---|---|
| Mintos | Latvia (LVA) | 5% (FTCR via UK–LV DTT) | Mintos · EU/EEA withholding |
| ViaInvest | Latvia (LVA) | 5% | Latvijas Banka · Viainvest |
| Esketit | Ireland (IRL) | 0% | CrowdSpace · Esketit Ltd |
| Bondora / Monefit | Estonia (EST) | 0% | Finantsinspektsioon · Bondora |
| MacClear | Switzerland (CHE) | 0% | Maclear AG · PolyReg SRO |
| PeerBerry | Croatia (HRV) | 0% | PeerBerry · Legal entity (Zagreb) |
| Crowdpear | Lithuania (LTU) | 0% (DAS-1) | Crowdpear · ECSP licence |
| Inrento | Lithuania (LTU) | 10% (DAS-1, FTCR) | Inrento · Tax info |
| Fintown | Czech Rep. (CZE) | 0% | CNB · ECSPR register |
| Robocash | Croatia (HRV) | 0% | Robocash · Move to Croatia |
HMRC references: SAIM9090 · UK source of interest, SAIM12010 · P2P lending, SA106 Notes 2025. HMRC has not published guidance specifically reconciling the Ardmore substantive-debtor test with EU P2P intermediaries - the table above reflects the prevailing practitioner default.
Foreign Interest with Tax Withheld (SA106)
Foreign interest on which any foreign tax has been withheld - including coupons from foreign bonds and loan stock - must be reported on the SA106 Foreign pages, in the section "Interest and other income from overseas savings". The SA100 box 3 shortcut is only for untaxed foreign interest up to £2,000 (with the country noted in "Any other information"); the moment foreign tax is withheld, or the total exceeds £2,000, or you are claiming Foreign Tax Credit Relief, the Foreign pages are required.
SA106 "Overseas savings" columns (A–F)
| Column | What goes in it |
|---|---|
| A | 3-letter country code where the income arose (a separate row per country). |
| B | Gross income in GBP, before any foreign tax taken off. |
| C | Foreign tax paid in GBP - the lower of the tax actually withheld and the credit allowed under the relevant treaty (DTA). |
| E | Put 'X' here if you are claiming Foreign Tax Credit Relief. |
| F | Taxable amount. If claiming FTCR, the same as column B (gross). If not claiming FTCR, column B minus column C (deduction relief). |
Foreign bond and loan-stock coupons are "interest" for this section - they belong here, not in the dividend section.
Foreign Tax Credit Relief (FTCR) - the cap
FTCR is the lower of:
- the foreign tax paid, restricted to the treaty rate (commonly 0%, 10% or 15% for interest, depending on the specific DTA); and
- the UK tax due on that same interest.
Foreign tax withheld above the treaty rate is not creditable in the UK - you must reclaim the excess from the foreign tax authority, or instead take deduction relief (carry column F = B − C). Many treaties tax cross-border interest at 0% at source (e.g. UK–US), so any tax withheld may need to be reclaimed abroad rather than credited here.
HMRC references: SA106 Foreign notes 2025–26, HS263 · Relief for Foreign Tax Paid.
Self Assessment Filing
Key Deadlines
| Tax Year | Paper Deadline | Online Deadline | Payment Due |
|---|---|---|---|
| 2024/25 | 31 Oct 2025 | 31 Jan 2026 | 31 Jan 2026 |
| 2025/26 | 31 Oct 2026 | 31 Jan 2027 | 31 Jan 2027 |
Required Forms
- SA100: Main tax return - dividends, interest income
- SA101: Additional information - other UK/foreign income not covered elsewhere
- SA108: Capital gains supplementary page - stocks, crypto, other assets
- SA106: Foreign income - if foreign dividends exceed £500, untaxed foreign interest exceeds £2,000, interest had foreign tax taken off, or you claim Foreign Tax Credit Relief (2025/26 return; smaller amounts can go in SA100 box 3 for interest and boxes 6 and 7 for dividends)
Offshore Funds (Non-Reporting)
Non-reporting offshore funds are taxed as offshore income gains (income tax), not CGT. Use the standard share matching rules (same-day, 30-day, Section 104), and report on SA106 when required.
How Tax-Wizard Helps
Tax-Wizard generates an Excel report with values mapped to the exact SA108/SA100 boxes:
- Section 104 pooling calculations for each security
- Bed and breakfast matching applied automatically
- Separate sheets for CGT Summary, SA108 details, dividends
- Foreign tax credit calculations per country
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