UK vs Germany taxes (2026): company, income and capital gains

United Kingdom vs Germany tax rates at a glance

Tax	🇬🇧 United Kingdom	🇩🇪 Germany
Income tax	Personal income tax: 20% to 45% Personal allowance: GBP 12,570 Scottish top rate: 48% Employee National Insurance: 8% Employer National Insurance: 15%	Basic allowance: EUR 12,348 Entry rate: 14% Top rate: 45% Solidarity surcharge: 5.5% Church tax: 8% / 9% Employee pension, unemployment, health and care contributions: Capped
Corporate tax	Corporation tax: 25% Small profits rate: 19% Marginal relief band: GBP 50,000 to GBP 250,000 VAT: 20%	Corporation tax: 15% Solidarity surcharge: 5.5% Trade tax base rate: 3.5% Trade tax effective range: 7% - 20.3% DMTT / Pillar Two: 15%
Capital gains tax	Annual exempt amount: GBP 3,000 Basic rate CGT: 18% Higher and additional rate CGT: 24% Business Asset Disposal Relief: 18%	Securities gains tax: 25% Solidarity surcharge: 5.5% Church tax: 8% / 9% Saver allowance: EUR 1,000 / EUR 2,000 Private-sale holding period: 1 year / 10 years
Dividend tax	Dividend allowance: GBP 500 Basic rate dividend tax: 10.75% Higher rate dividend tax: 35.75% Additional rate dividend tax: 39.35% Withholding tax on ordinary dividends: 0%	Dividend withholding tax: 25% Solidarity surcharge: 5.5% Church tax: 8% / 9% Annual saver allowance: EUR 1,000 / EUR 2,000
Wealth tax	Net wealth tax: 0% Inheritance tax: 40% Capital gains tax: 24% ATED scope: GBP 500,000+	Net wealth tax: 0% Net worth tax: 0% Annual asset tax: 0%
Inheritance / estate tax	Standard inheritance tax: 40% Nil-rate band: GBP 325,000 Residence nil-rate band: GBP 175,000 Lifetime gifts: Potentially 0% to 40%	Tax class I: 7% - 30% Tax class II: 15% - 43% Tax class III: 30% - 50% Tax-free allowances: EUR 20,000 - EUR 500,000
VAT / GST / sales tax	VAT: 20%	VAT: 19% / 7%

Who wins on each tax

Personal income taxTie

Both main systems reach 45%, though Germany's solidarity surcharge and social security and the UK's personal allowance change effective rates.

Corporate taxUnited Kingdom

UK corporation tax is 19% for small profits and 25% for large profits; German corporation tax plus municipal trade tax often produces about 30%.

Capital gains taxUnited Kingdom

UK CGT is 18% or 24% for 2026/27, below Germany's usual 26.375% securities rate including solidarity surcharge.

Dividend taxGermany

Germany generally taxes dividends at 26.375% before church tax, while UK rates range from 10.75% to 39.35%; the marginal band decides the comparison.

Wealth taxTie

Neither currently levies a broad net wealth tax; Germany has property and inheritance exposure, while the UK adds inheritance tax and ATED for some property structures.

The verdict

Both ordinary income systems reach 45%, but Germany adds solidarity surcharge and material social insurance while the UK provides a GBP 12,570 personal allowance before its main bands.

The UK usually wins for liquid investors: CGT is 18%/24% and Germany's securities burden is generally 26.375%. Germany's company burden often approaches 30% after municipal trade tax, against UK 19%-25% corporation tax.

Choose the UK for a founder or investor prioritising exits and corporate flexibility; choose Germany for a real operating base and workforce. Payroll, permanent establishment, CFC and treaty residence should be modelled.

How to read this comparison

The UK is usually the lighter investor and company-tax answer; Germany is often the stronger operational answer. A German municipality and a UK shareholder's dividend band can change the apparent winner.

Frequently asked questions

Is Germany or the UK lower tax for investors?

The UK is usually lower for securities gains, while Germany can be competitive for dividends in a higher UK dividend band. Residence, church tax, allowances and asset classification matter.

Is Germany or the UK better for a company?

The UK has the lower typical corporate burden on the headline figures. Germany can still be the better commercial base when its workforce, customers and EU operating substance outweigh trade tax.

United Kingdom vs Germany taxes