UK vs Italy taxes (2026): income, CGT and inheritance tax

United Kingdom vs Italy tax rates at a glance

Tax	🇬🇧 United Kingdom	🇮🇹 Italy
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%	Personal income tax: 23% - 43% Regional surtax: 1.23% - 3.33% Municipal surtax: 0% - 0.9% Employee social security: around 10% Tax on wages: withholding applies
Corporate tax	Corporation tax: 25% Small profits rate: 19% Marginal relief band: GBP 50,000 to GBP 250,000 VAT: 20%	Corporate income tax: 24% IRAP: 3.9% Financial sector IRAP: higher Digital services tax: 3%
Capital gains tax	Annual exempt amount: GBP 3,000 Basic rate CGT: 18% Higher and additional rate CGT: 24% Business Asset Disposal Relief: 18%	Capital gains tax: 26% Government bonds: 12.5% Real estate gains: 0% / 26% Crypto gains: 33%
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: 26% Foreign dividends: 26% Corporate participation exemption: 95%
Wealth tax	Net wealth tax: 0% Inheritance tax: 40% Capital gains tax: 24% ATED scope: GBP 500,000+	Net wealth tax: 0% IVIE: 1.06% IVAFE: 0.2% IVAFE on privileged regimes: 0.4%
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%	Spouse and direct descendants: 4% Brothers and sisters: 6% Other relatives up to 4th degree: 6% Other beneficiaries: 8%
VAT / GST / sales tax	VAT: 20%	VAT: 22%

Who wins on each tax

Personal income taxTie

Italy's national top rate is 43% and the UK's main top rate is 45%; local surtaxes, INPS, allowances and Scotland-specific rates make take-home fact-specific.

Corporate taxUnited Kingdom

The UK has 19% small-profits and 25% main corporation-tax rates; Italy's 24% IRES generally sits beside 3.9% IRAP.

Capital gains taxUnited Kingdom

UK CGT is 18%/24% in 2026/27, below Italy's usual 26% rate, although business and property reliefs can alter both results.

Dividend taxTie

Italy generally taxes individual dividends at 26%; UK dividend rates run from 10.75% to 39.35% after the GBP 500 allowance, making the income band decisive.

Inheritance taxItaly

Italy's inheritance rates are generally 4%, 6% or 8% with relationship allowances, while UK inheritance tax is usually 40% above available nil-rate bands.

The verdict

The UK main income rates reach 45%; Italy's national IRPEF reaches 43% but regional and municipal surtaxes and INPS can make the real employment burden comparable.

The UK is generally better for listed-asset exits at 18%/24%, versus Italy's 26% standard capital-gains rate. Corporate tax is close on paper: UK 19%-25% versus Italy 24% IRES plus generally 3.9% IRAP.

Choose the UK for liquid investments and a portable company platform; choose Italy for an Italy-centred life, workforce or qualifying special regime. Residence, remittance, CFC and treaty rules must be checked before moving management.

How to read this comparison

The UK generally wins on capital gains and company simplicity; Italy's strongest case is an Italy-centred personal, family or special-regime plan. Neither can be judged from the top income rate alone.

Frequently asked questions

Is Italy or the UK lower tax?

The UK is usually lower for capital gains and often for company tax; Italy can be better for succession and for a resident who qualifies for a special regime.

Does Italy have an inheritance-tax advantage over the UK?

Italy's headline inheritance rates are lower, but allowances, family relationship, property situs, residence and forced-heirship rules still determine the estate result.

United Kingdom vs Italy taxes