UK Tax Year 2027/28: What Changes for Expats on 6 April

By Ciprian Bratu, Chartered MCSI · October 29, 2026

Last updated: 29 October 2026

Living abroad does not take you out of the UK tax year that starts on 6 April 2027. If you still have UK rent, UK savings, a SIPP or a gap in your National Insurance record, the 28 October 2026 Budget changes your numbers. The big moves are a 4-point rise in tax on savings and property income, pensions entering the estate for inheritance tax, and a cash ISA limit that stays at £20,000 after all. This round-up lists each change for 2027-28, says who it reaches when you live in Kuala Lumpur, Singapore, Bangkok or Dubai, and links to our detailed guides. Every figure is as announced at Budget 2026; the Finance Bill 2026-27 is not yet law.

Key Takeaways

From 6 April 2027, savings and property income are taxed at 24%, 44% and 49%, and most unused pensions count towards your estate for inheritance tax.
The Personal Allowance stays at £12,570 and the main income tax bands do not move, so pension and salary income is taxed as in 2026-27.
The planned cut to the cash ISA limit is reversed. The ISA limit stays at £20,000, but you cannot pay in while you are non-UK resident.
Voluntary Class 3 National Insurance rises to £19.05 a week, and 5 April 2027 is the last date for the old 3-year route from abroad.

What Changes for Income Tax in 2027/28?

Tax on savings and property income rises by 4 percentage points across every band, while tax on earnings, pensions and dividends stays where it is. Budget 2025 had already added 2 points from April 2027. Budget 2026 adds 2 more from the same date.

Income type	2026-27 rates	2027-28 rates
Employment and pension income	20% / 40% / 45%	20% / 40% / 45%
Savings income	20% / 40% / 45%	24% / 44% / 49%
Property income	Main rates (20% / 40% / 45%)	24% / 44% / 49%
Dividends	10.75% / 35.75% / 39.35%	10.75% / 35.75% / 39.35%

The bands for England, Wales and Northern Ireland stay at £1 to £37,700 for the basic rate, £37,701 to £125,140 for the higher rate, and over £125,140 for the additional rate. Scottish taxpayers have their own bands. The Personal Allowance stays at £12,570 and still tapers away above £100,000. Source: Budget 2026 Annex A: rates and allowances.

Which allowances stay the same?

The £5,000 starting rate for savings, the £1,000 and £500 Personal Savings Allowance and the £500 dividend allowance are all unchanged for 2027-28. So are the Marriage Allowance of £1,260 and the capital gains annual exempt amount of £3,000.

Does UK Tax Still Reach You If You Live Abroad?

Yes, on UK income. GOV.UK says you usually pay tax on UK income even when you are not UK resident, including pension, rental income, savings interest and wages. GOV.UK also says non-residents do not usually pay UK tax on the State Pension or on interest from gilts.

What if you rent out a UK home?

A flat in Manchester let while you work in Singapore stays inside the UK tax net. From 2027-28 property income has its own rates of 24%, 44% and 49%. Your letting agent or tenant deducts basic rate tax from the rent unless HMRC approves you under the non-resident landlord scheme to receive it in full and declare it through Self Assessment. A UK tax adviser should confirm how the new rates apply to your own figures.

Do you need Making Tax Digital from abroad?

The Budget exempts “expected non-resident customers” from Making Tax Digital for Income Tax until further notice, alongside non-UK resident entertainers and sportspeople. Secondary legislation is due before April 2027. If you file a UK return only for rental income, watch for the HMRC detail on who counts.

What about buying UK property?

Stamp Duty Land Tax rates are 2 percentage points higher where the non-UK resident surcharge applies. A separate High Value Council Tax Surcharge on homes worth £2 million or more starts in April 2028.

What Happens to Pensions on 6 April 2027?

Most unused pension funds and death benefits count towards your estate for UK inheritance tax from 6 April 2027, and a UK-established pension stays in scope wherever you live. The rule was enacted in the Finance Act 2026. Budget 2026 made only minor technical changes, including letting a prospective personal representative direct the scheme to pay the tax to HMRC.

The pension allowances do not change for 2027-28. The Annual Allowance stays at £60,000, the Money Purchase Annual Allowance at £10,000, the Lump Sum Allowance at £268,275, and the Lump Sum and Death Benefit Allowance at £1,073,100. The Overseas Transfer Allowance also stays at £1,073,100.

Two Budget changes affect death benefits. The two-year rule goes for payments made on or after 28 October 2026, so a tax-free death benefit no longer becomes taxable just because it is paid late. Lump sums above the death benefit allowance will be taxed by a separate charge on the beneficiary. Our pension inheritance tax guide for expats covers the long-term resident test, the tail and who pays.

What does the new Pension Tax Allowance do?

From 2027-28, UK taxpayers above State Pension age with total income up to £13,037 get an income tax reduction worth up to £94, tapering to nil at £13,319. The full new State Pension is £13,036.40 for 2027-28. If you live abroad, the State Pension question is mainly about uprating. Our guide to the State Pension increase in April 2027 explains which countries get the rise.

What Happens to ISAs in 2027/28?

The ISA limit stays at £20,000 for 2027-28, and the government has decided not to reduce the cash ISA limit. Many guides written before 28 October still describe a cut to the cash ISA limit from April 2027. The Budget reversed it. The Junior ISA limit stays at £9,000.

For most readers abroad, the limit is academic. GOV.UK says that once you move abroad and become non-UK resident you cannot put money into an ISA, unless you are a Crown employee working overseas or their spouse or civil partner. You can keep the ISA and transfer it between providers. You can pay in again when you return. Our post on what to do with a UK ISA after moving to Malaysia covers the options.

What Are the National Insurance Rates for 2027/28?

Voluntary Class 3 rises to £19.05 a week in 2027-28, from £18.40, using September 2026 CPI of 3.5%. Voluntary Class 2 rises to £3.80, but it is closed for time abroad from 2026-27.

To pay Class 3 for time abroad after 5 April 2026, you need 10 years of UK residence in a row or 10 qualifying years. One transitional route under the old 3-year rule ends on 5 April 2027. It applies only to people who applied for 2024-25 or 2025-26 contributions on or before 5 April 2026. They must pay those, and apply for 2026-27 Class 3, by 5 April 2027. The rules are on GOV.UK’s page on voluntary National Insurance from abroad.

Our view has not changed with the higher cost. Where you qualify, filling NI gaps is still one of the best investments you can make in yourself, even though the payback now takes longer than it did under Class 2. Our voluntary NI guide for expats sets out who still qualifies.

What Should You Check Before 6 April 2027?

Four checks cover most expats: your UK income sources, your pension nominations, your NI record and any ISA you still hold. Each has a different deadline or trigger.

List what you earn in the UK and which country taxes it under your treaty. Our guide to UK pension tax in Malaysia, Singapore and the UAE shows how the treaties split pension income.
Check your pension nominations and your will. They decide who receives your pension and who deals with the inheritance tax after 6 April 2027.
Look at your NI record. If you applied under the old rules before 6 April 2026, 5 April 2027 is your date.
If you left the UK this year and still hold an ISA, tell your ISA provider and stop paying in.

Frequently Asked Questions

When does the 2027/28 UK tax year start?

The 2027-28 tax year runs from 6 April 2027 to 5 April 2028. The new savings and property income rates, the Pension Tax Allowance, the new NI rates and inheritance tax on pensions all start from that date. The figures were announced at Budget 2026 on 28 October 2026.

What are the savings tax rates for 2027/28?

Savings income is taxed at 24%, 44% and 49% in 2027-28, up from 20%, 40% and 45% in 2026-27. The £5,000 starting rate for savings and the £1,000 and £500 Personal Savings Allowance do not change. GOV.UK says non-residents usually pay UK tax on UK savings interest.

Is the cash ISA limit being cut in April 2027?

No. Budget 2026 reversed the planned cut, so the cash ISA limit stays at £20,000 within the overall £20,000 ISA limit. If you are non-UK resident, you cannot pay into an ISA at all, apart from Crown employees overseas and their spouses or civil partners. See UK ISA rules after moving to Malaysia.

Do I pay the new property income rates if I rent out a UK home from abroad?

GOV.UK says non-residents pay UK tax on UK rental income. From 2027-28 property income has its own rates of 24%, 44% and 49%. Your tenant or agent deducts basic rate tax unless HMRC approves you to receive rent in full. A UK tax adviser should confirm your own position.

Are UK pensions subject to inheritance tax from April 2027 if I live abroad?

Yes, for a pension established in the UK. From 6 April 2027, unused funds and most death benefits count towards the estate, and a UK scheme counts as a UK asset whatever your residence. Read our pension inheritance tax guide for expats.

How much is voluntary Class 3 National Insurance in 2027/28?

Class 3 is £19.05 a week in 2027-28, up from £18.40. That is £990.60 over 52 weeks. For time abroad after 5 April 2026 you need 10 years of UK residence in a row or 10 qualifying years. See our State Pension April 2027 guide.

If 6 April 2027 changes the tax on your UK rent, savings or pension, it is worth mapping your UK assets against the country you live in now. We can walk through it with you and flag what to take to a UK tax specialist.

Book a no-obligation call with Ciprian

This content is for informational purposes only and does not constitute personalised financial, investment, or tax advice. By reading this post, you agree to our disclaimer.