BUDGET 2026: What you need to know if you’re an investor

Chancellor John Healey has delivered his first Budget, with some important implications for people who invest to build their wealth and save for the future.

One piece of reassuring news for those who were concerned about possible tax rises: Capital Gains Tax (CGT) rates are staying unchanged.

Here’s what the Budget means for your investments.

Capital Gains Tax: no increase

There had been speculation that the Chancellor could increase Capital Gains Tax, which is charged on profits made when you sell certain assets, including shares held outside an ISA.

However, Healey has decided against raising CGT rates. The decision follows concerns that higher rates could discourage investors from selling assets or encourage wealthy people to move their money overseas.

What this means for you: The main CGT rates remain 18% for gains within the basic-rate Income Tax band and 24% for gains above it. You also have an annual tax-free allowance of £3,000.

If you hold investments outside an ISA, CGT could still be a significant cost when you sell at a profit. But there is no additional rate increase to factor into your plans following this Budget announcement.

Planned changes to investment ISAs will not now go ahead

The Chancellor has confirmed that the planned cut to the Cash ISA allowance will not go ahead. From April 2027, savers will still be able to put up to £20,000 a year into a Cash ISA, reversing the previous plan to reduce the limit to £12,000 for under-65s. The overall annual ISA allowance also remains £20,000.

This has implications for Stocks and Shares ISAs now too.

When the announcement about the cut to the Cash ISAs allowance limit was made, the government announced it would be making changes to investment ISAs to prevent people using them as a workaround to hold cash – for example, holding uninvested cash in their investment ISA, or putting money into cash-like investments. The measures that the government took to try and close these loopholes included a 22% charge on interest earned from cash held in stocks and shares ISA, a ban on cash-like investments, and a ban on transfers from non-cash ISAs to cash ISAs for under-65s.

However, the Government has confirmed today that these measures will not go ahead as planned.

What this means for you: If you invest through a Stocks and Shares ISA, you won’t now face the planned 22% charge on interest earned from cash held in your account, or the proposed restriction on transferring money from a Stocks and Shares ISA to a Cash ISA if you’re under 65. We’ll have to wait and see how investment platforms respond to this U-turn as they will have been making preparations for the changes.

This gives investors more flexibility to manage money within ISAs, including keeping large amounts of cash, uninvested, within Investment ISAs to take advantage of high interest rates, and the ability to move savings between cash and investments as your needs change.

However, remember that a Stocks and Shares ISA is designed for investing, and holding too much money in cash for long periods could mean missing out on potential investment growth. Equally, investing money you might need in the short term could expose you to unnecessary risk. The best approach depends on when you’ll need your money and how much uncertainty you’re comfortable with.

‘Starter investment ISA’ to be launched

The Chancellor has confirmed that the Government will “work with industry to explore a new ISA incentive for people investing in a stocks and shares ISA for the first time”. We’ll need to wait for further details on exactly what this will offer new investors and how it differs from existing Stocks and Shares ISA products. Personally, I hope it includes more education and support understanding who investing is right for, what confusing investment terminology actually means, how to decide what your risk appetite is, and how to choose what to invest in – all questions we regularly get asked.

Stamp Duty on shares being replaced

The Treasury has unveiled the introduction of a new ‘Securities Transfer Tax’ which will replace Stamp Duty on shares. The change is chalked up to happen by the end of 2027.

This will most likely be a technical name-change rather than a change in the rate investors are charged for selling shares.

Currently, the standard Stamp Duty rate on shares is 0.5% of the value of the shares being sold.

When you buy shares through a typical online investment platform, the transaction is usually settled electronically through a system called CREST. In this case, Stamp Duty Reserve Tax (SDRT) normally applies at 0.5% of the purchase price. It’s generally collected automatically as part of the transaction, so you don’t need to arrange payment yourself.

If you buy shares using a stock transfer form, Stamp Duty generally applies when the amount paid is more than £1,000. The rate is 0.5%, rounded up to the nearest £5.

Former Chancellor Rachel Reeves introduced a three-year stamp duty holiday on newly listed company shares in her Budget last year in an attempt to boost the number of businesses opting for a London IPO. It came into effect on 27 November 2025.

The Treasury said it had heard from “industry feedback that cutting Stamp Taxes on Shares could boost UK capital market competitiveness” and that it will possible extensions to this holiday “under review”.

Don’t forget about dividend tax

Investors who receive dividends outside an ISA have already been facing higher tax rates since April 2026, following changes announced in the previous Budget. The ordinary dividend tax rate rose to 10.75%, while the upper rate increased to 35.75%. The additional rate remains 39.35%. The £500 dividend allowance is unchanged.

What this means for you: If you hold dividend-paying shares outside an ISA, you could pay more tax on income above your available allowances. Dividends from shares held within a Stocks and Shares ISA remain tax-free.

What should investors do now?

The decision not to increase CGT provides some certainty, but it doesn’t mean you should rush to sell investments or change your portfolio.

Instead, check whether your investments remain suitable for your goals, whether you’re making use of available tax-free allowances and whether your money is spread across investments in a way that reflects the level of risk you’re comfortable taking.