Rising Dividend, Savings and Property Income Tax Rates. What It Means For Your Legal Planning

Posted 01 Dec, 2025

From April 2026, the tax rates on dividend income, savings income and property income will increase by two percent. Although this is a financial change, we see the legal impact of it every day. When clients feel pressure on their investment or rental income, they often review the legal side of their affairs, especially their wills, property arrangements and plans for future decision making.

How Higher Income Taxes Can Affect Your Will

When clients change how they use or hold investment or rental income, their estate can change too. This can affect who receives what and how cleanly an estate can be administered. A will should always match your current situation. You may need an update if you have:

• changed how property is owned,
• gained or given up an income producing asset,
• reorganised savings or joint accounts.

A clear will prevents confusion for your executors and gives certainty to your beneficiaries.

What It Means For Probate

Estates that include investment accounts or rental property often require extra steps during probate. This might involve valuations, closing certain accounts or dealing with rental income that is still coming in. Even when accountants handle any tax calculations, your executors still rely on:

• a legally sound will,
• clear instructions,
• organised records.

Updating your paperwork now will make probate smoother for those who have to manage it later.

How Property Decisions May Change

Clients who own rental property sometimes look again at ownership structures when their property income is affected. Some choose to transfer property within a family. Others buy out a co owner or decide to sell. We do not advise on the financial side of these decisions, but we do handle:

• transfers of equity,
• sales and purchases,
• changes in legal ownership.

These steps must be done with careful documentation to protect your interests.

Why LPAs Matter Even More

When the wider financial environment shifts, clients often think about who would manage their money or property if they could not do it themselves. A Lasting Power of Attorney lets you choose someone you trust to step in if needed. Many clients put LPAs in place while also reviewing their wills or property arrangements so everything works together.

What To Think About Next

This change is about income tax, however the effects reach into many other parts of life. It is a good time to check that:

• your will is up to date,
• your executors and attorneys are still the right people,
• your property ownership reflects your wishes,
• your records are easy for your family or executors to find.

These steps give you control and protect the people who would need to sort things out if anything unexpected happened.

If you would like support with wills, probate, conveyancing or LPAs, our Private Client team is here to help you plan with clarity and confidence.