[World Tax News] UK Budget 2025 | Russia Foreign Company Registration | Brazil Dividend Tax Updates

Editorial Team – [2025] 181 taxmann.com 200 (Article)

World Tax News provides a weekly snippet of tax news from around the globe. Here is a glimpse of the tax happening in the world this week:

1. UK Budget 2025 Presented to Parliament With Comprehensive Tax Measures

UK Chancellor of the Exchequer Rachel Reeves delivered the Budget 2025 to Parliament on 26 November 2025. The Budget outlines several tax measures to be legislated in the Finance Bill 2025-26, summarised in the Budget 2025 ‘Overview of Tax Legislation and Rates (OOTLAR)’.

Personal Tax Measures

Income Tax Personal Allowance and Thresholds

As announced in Budget 2025, Finance Bill 2025-26 will fix the Personal Allowance at £12,570 and the basic rate limit at £37,700 for the tax years 2028-29 to 2030-31, resulting in a higher-rate threshold of £50,270.

• Changes to the Personal Allowance apply UK-wide.
• Changes to the basic rate limit and higher-rate threshold apply to non-savings, dividend, and property income in England, Wales, and Northern Ireland, and to savings and dividend income across the UK.
• Income tax rates and bands for Scottish taxpayers remain subject to Scottish Parliament decisions.

Income Tax Charge and Rates for 2026-27

Finance Bill 2025-26 will set the income tax charge and corresponding rates for 2026-27, including:

• Main rates for non-savings and non-dividend income in England, Wales, and Northern Ireland.
• Default rates for taxpayers not covered by main, Welsh, or Scottish rates.

Welsh taxpayers will continue to have UK rates reduced by 10p, with the Senedd setting the Welsh rates.

Separate Tax Rates for Property Income

From 6 April 2027, new property income tax rates apply:

• 22% basic rate
• 42% higher rate
• 47% additional rate

These apply in England, Wales, and Northern Ireland. Discussions with devolved governments will explore extending rate-setting powers.

Dividend Income Tax Rates

From 6 April 2026, dividend income tax rates will change as follows:

• Ordinary Rate – 10.75% (increased by 2 ppts)
• Upper Rate – 35.75% (increased by 2 ppts)
• The additional rate remains 39.35%.

Savings Income Tax Rates

From 6 April 2027, savings income rates increase by 2 ppts across all bands:

• Basic – 22%
• Higher – 42%
• Additional – 47%

VCTs, EIS and VCT Relief Changes

Finance Bill 2025-26 will increase EIS and VCT investment and asset limits and reduce VCT income tax relief from 30% to 20%, effective 6 April 2026.

Carried Interest Regime Reform

A revised Income Tax-based regime for carried interest will take effect from 6 April 2026, following stakeholder consultation in 2025.

Capital Allowances

A new 40% first-year allowance will apply for expenditure on or after 1 January 2026, while the main writing-down allowance will reduce to:

• 14% (Corporation Tax from 1 April 2026)
• 14% (Income Tax from 6 April 2026)

Removal of Tax Relief for Homeworking Expenses

From 6 April 2026, the deduction for non-reimbursed homeworking expenses will be abolished, though employers may still reimburse such costs tax-free where eligible.

Enterprise Management Incentive (EMI) Expansion

From 6 April 2026, EMI scheme limits will increase:

• Company Option Value Cap – £6m
• Gross Assets Limit – £120m
• Employee Limit – 500
• Exercise period extended to 15 years (retrospective for existing contracts)

Umbrella Company Market Compliance

From 6 April 2026, agencies will become responsible for PAYE on workers supplied via umbrella companies; responsibility falls to the end-client where no agency is involved.

Corporate Tax Measures

Corporation Tax Rates

Finance Bill 2025-26 will maintain:

• Main Rate: 25%
• Small Profits Rate: 19%

for financial year starting 1 April 2027.

Source – Budget 2025

2 Russia Mandates Bank-Facilitated Tax Registration for Foreign Companies Opening Accounts

Russia has enacted Federal Law No. 416-FZ of 17 November 2025, published in the Official Gazette, introducing a revised procedure for tax registration of foreign companies seeking to open bank accounts in Russia. Since tax registration is a prerequisite for account opening, foreign entities were previously required to file the registration application and supporting documents directly with the Federal Tax Service (FTS). Alternatively, the process could be facilitated through the bank, though this option was not uniformly available, as not all banks undertook such filings.

Under Federal Law No. 416-FZ, effective 1 September 2026, banks are now mandated to carry out the tax registration process on behalf of foreign companies when processing applications to open an account.

Source – Federal Law No. 416-FZ

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