UK tax friendliness score down after Budget 2026 asset-income hike

We lowered the United Kingdom’s tax friendliness score from 4.9 to 4.6 on Country To Live. In Budget 2026, the government kept headline rates on earnings unchanged, then stacked another two percentage points onto the income-tax rates that apply to property and savings income from 6 April 2027. That sits on top of the Budget 2025 hike already scheduled for the same date.

This is a data call for people comparing how friendly the UK tax setup feels if rentals, dividends, or taxable interest matter in your plan. It is not tax advice, and employment income rates are not the hook here.

Budget 2026 property and savings tax rates

• Extra 2pp on asset income. Budget 2025 already lifted savings and property income tax rates by two points from April 2027. Budget 2026 adds another two points from that date, so the stacked move is four points versus the pre-Budget 2025 baseline.
• Published bands for 2027–28. Property income rates move to 24% / 44% / 49% (England, Wales, Northern Ireland). Savings income rates move to the same 24% / 44% / 49% bands UK-wide, per the Budget document and OOTLAR annex.
• Earnings rates held. The government repeats that headline income tax, National Insurance, and VAT rates on earnings stay put. The revenue ask targets taxable income from assets, not the main employment bands.
• ISA cash allowance relief is a partial offset. The Budget reverses a planned cut to the cash ISA allowance, which helps tax-free saving wrappers, but it does not cancel the higher rates on taxable property and savings income outside those wrappers.
• We moved tax friendliness only 0.3. The signal is clearer for landlords, portfolio income, and taxable interest. It is not a claim that every UK paycheck just got harder.

Tax friendliness score for UK movers

Tax friendliness on Country To Live tracks how workable the tax setup feels for someone comparing destinations: rates that bite movers, surprises for rental or investment income, and whether the system stays predictable. A 4.6/10 is a modest step down from 4.9, and it still sits well below the UK’s stronger scores for English, jobs, and safety.

Open the United Kingdom country page, run United Kingdom vs United States, or load the UK in the compare tool. Peers such as Ireland, Portugal, and the United States remain useful checks if tax on property or savings is part of your model. Scan all country scores to see where 4.6 lands.

Practical checks before you model UK tax

1. Separate employment income from property and savings income when you stress-test a 2027–28 UK year.
2. Confirm whether rental or taxable interest income would sit in the new property or savings bands, or inside an ISA wrapper that still shields it.
3. Pair this score with housing and cost of living. A tougher asset-income schedule does not fix London rent on its own.

We will update again if Finance Bill drafting softens the rates, delays the April 2027 start, or stacks further asset-income measures.

This note explains our editorial scoring only. It is not tax, legal, or relocation advice.