UK Budget of 28 October 2026: What Changes for the Owner of a UK LTD

On 28 October 2026 the Chancellor of the Exchequer, John Healey, presented Budget 2026 to Parliament. For companies the headline is stability: the main rate of Corporation Tax stays at 25% and the small profits rate at 19%, both confirmed for the financial year beginning 1 April 2028. The other decisions concern capital allowances on equipment, the sale of a business, loans and dividends from foreign companies, and overseas branches. Here is what affects the owner of a UK LTD who lives outside the United Kingdom, and which dates to put in the calendar (Budget 2026, HM Treasury; Overview of tax legislation and rates, OOTLAR).

Rates and allowances: what is confirmed and what changes

Dividend and employment income rates were left alone in this Budget: in his speech the Chancellor said that the two-point rise from April 2027 applies only to property and savings income (Budget 2026 speech, 28 October 2026). The 25% main rate stays in place beyond that: the government reaffirmed the commitments of the 2024 Corporate Tax Roadmap.

Distributions reform from April 2028: loans and dividends from foreign companies

Alongside the Budget, the Treasury published the outcome of the consultation “Modernising the distributions framework” and decided to proceed with all seven proposals (summary of responses, 28 October 2026). A technical consultation on draft legislation will take place in 2027, and the new rules are intended to apply from April 2028. Two points matter for owners of foreign structures:

1. Loans from non-UK close companies. A temporary charge will apply to loans and advances made to a participator by a non-UK resident company, modelled on the section 455 rule for UK companies. The individual pays it, and it is repaid when the loan is repaid, released or written off. The government is considering limiting the rule to participators with a material interest and to loans outside the company’s commercial purposes.
2. Dividends from non-UK resident companies. Distributions of foreign companies within paragraphs B, G and H of section 1000(1) CTA 2010 will be brought into the Income Tax charge in the same way as distributions of UK companies, and a stock dividend charge will be introduced.

The other five proposals: limiting repayments of capital to the capital originally subscribed, a wider statutory demerger relief, priority rules between loans and distributions, objective conditions for a purchase of own shares, and a rewrite of the transactions-in-securities anti-avoidance rules. These rules concern UK tax residents who own companies abroad. If the owner of a UK LTD lives in another country, dividends are taxed under the rules of the country of residence; for residents of Ukraine this also means the controlled foreign company rules.

Overseas branches of a UK LTD: the exemption becomes mandatory

Today a UK company chooses whether to take the profits and losses of its overseas permanent establishments out of Corporation Tax. For accounting periods beginning on or after 1 January 2027, the exemption regime for the profits and losses of overseas branches becomes mandatory (HMRC policy paper). If your LTD has an office, warehouse or representative office outside the UK, agree with your accountant before the first such period how the tax computation and the treatment of branch losses will change. Where a company is tax resident and when a permanent establishment arises is explained in our guide on company tax residency.

Calendar for a UK LTD owner: November 2026 to April 2028

1. By 11:59pm on 21 November 2026 — the Treasury consultation “Corporate Tax Simplification for Business Investment”: proposals on simplifying the tax can be submitted. HMRC’s separate call for evidence on Corporation Tax administration is open until 20 January 2027.
2. 1 January 2027 — 50% first-year allowance on main-rate equipment. For accounting periods beginning from this date the mandatory exemption for overseas branches applies.
3. 1 April 2027 — the main rate writing-down allowance falls to 12%; the R&D claim notification form is removed.
4. 6 April 2027 — BADR limit of £500,000: if a sale of the LTD or of a shareholding with a gain above that amount is already planned, discuss the timing with an adviser in advance. From the same date the 24/44/49% rates apply to savings and property income.
5. 2027 — technical consultation on the distributions reform; in late 2027 the Securities Transfer Tax replaces Stamp Duty and SDRT.
6. April 2028 — the distributions reform takes effect, including the charge on loans from foreign companies.

The Budget did not change the LTD’s filing duties with Companies House and HMRC: the deadlines for the confirmation statement, annual accounts and the Corporation Tax return are as before, and their calendar is in our guide on annual company maintenance by country. Registration conditions, taxes and filings of a UK LTD for a non-resident are on the page UK LTD company formation, and how we work is described under company formation and maintenance. If you are choosing between a UK LTD and a US LLC, the comparison of taxes and filings is in UK LTD vs US LLC.

Frequently asked questions