01/06/2026

Tax return checks

You may be due to complete your tax return as usual or for the first time about now. Or may not be sure if you need to.

There are three areas that you will want to be sure you understand when you complete your return:

  • CGT
  • Interest Payments
  • Dividend Payments

The rules and allowances have recently changed so here is our quick guide:

Capital Gains Tax (CGT)

CGT applies when you dispose of assets such as shares, funds, investment property (not your main residence in many cases), crypto assets, or other chargeable assets.

Annual Exempt Amount (CGT allowance)

Taxpayer Allowance
Individuals £3,000
Most trustees £1,500
   

You only pay CGT on gains above this amount after deducting allowable losses.

CGT rates (most assets)

Tax band CGT rate
Gains falling within unused basic-rate band 18%
Gains above the basic-rate band 24%
   

These rates apply to:

  • Shares
  • Funds
  • Investment property
  • Most other chargeable assets

 

Interest (Savings Income)

Personal Savings Allowance (PSA)

Taxpayer status Tax-free interest
·       Basic-rate taxpayer ·       £1,000
·       Higher-rate taxpayer ·       £500
·       Additional-rate taxpayer ·       £0

Interest above these allowances is taxed at your marginal income tax rate.

Starting Rate for Savings

You may also get up to £5,000 of savings interest taxed at 0% if your non-savings income is low.

The full £5,000 is available when your non-savings income is at or below the Personal Allowance (£12,570). It reduces by £1 for every £1 that non-savings income exceeds £12,570.

Key rules

  • Interest within a Cash ISA is tax-free.
  • Banks normally pay interest gross and report it to HMRC.
  • HMRC often collects tax on excess interest through PAYE code adjustments rather than requiring a tax return.

Dividends

Dividend income is taxed after considering your Personal Allowance and Dividend Allowance.

Dividend Allowance

  • First £500 of dividend income each tax year is taxed at 0%.
  • This allowance is separate from your Personal Allowance.

 

Dividend tax rates (2026–27)

Tax band Dividend tax rate
Basic rate 10.75%
Higher rate 35.75%
Additional rate 39.35%

These rates apply only to dividend income above any available Personal Allowance and the £500 Dividend Allowance.

Key rules

  • Dividends inside an ISA are tax-free.
  • Dividends count towards your total taxable income and can push you into a higher tax band.
  • If your total income is below your Personal Allowance, dividends can be covered by that allowance before dividend tax applies.

 

If you would like to discuss tax efficiency with your savings and investments, then please speak to your adviser of contact us direct.

 

01733 314553                   info@brookswealth.co.uk                      www.brookswealth.co.uk