United States vs United Kingdom taxes (2026): income, corporate and capital gains

United States vs United Kingdom tax rates at a glance

Tax	🇺🇸 United States	🇬🇧 United Kingdom
Income tax	Personal income tax: 10% - 37% Social Security: 6.2% Medicare: 1.45% Additional Medicare: 0.9% State income tax: Varies	Personal income tax: 20% to 45% Personal allowance: GBP 12,570 Scottish top rate: 48% Employee National Insurance: 8% Employer National Insurance: 15%
Corporate tax	C corporation tax: 21% CAMT: 15% Pass-through entities: Different State tax: Varies	Corporation tax: 25% Small profits rate: 19% Marginal relief band: GBP 50,000 to GBP 250,000 VAT: 20%
Capital gains tax	Long-term capital gains: 0% - 20% Short-term capital gains: 10% - 37% Qualified dividends: 0% - 20% NIIT: 3.8%	Annual exempt amount: GBP 3,000 Basic rate CGT: 18% Higher and additional rate CGT: 24% Business Asset Disposal Relief: 18%
Dividend tax	Qualified dividends: 0% - 20% Ordinary dividends: 10% - 37% NIIT: 3.8% State tax: Varies	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%
Wealth tax	Net wealth tax: 0% Property tax: Varies Estate tax: Up to 40% Gift tax: Up to 40%	Net wealth tax: 0% Inheritance tax: 40% Capital gains tax: 24% ATED scope: GBP 500,000+
Inheritance / estate tax	Federal inheritance tax: 0% Federal estate tax: Up to 40% Federal gift tax: Up to 40% Basic exclusion: $15,000,000	Standard inheritance tax: 40% Nil-rate band: GBP 325,000 Residence nil-rate band: GBP 175,000 Lifetime gifts: Potentially 0% to 40%
VAT / GST / sales tax	Sales tax: Varies by state	VAT: 20%

Who wins on each tax

Personal income taxUnited States

The U.S. top federal ordinary rate is 37%, below the UK's 45% top rate outside Scotland and 48% Scottish top rate, though state taxes can change the total.

Corporate taxUnited States

The U.S. federal corporate rate is 21%, below the UK's 25% main rate, though state corporate taxes can add to it.

Capital gains taxUnited States

U.S. federal long-term capital gains are usually taxed more lightly than UK capital gains.

Transfer taxesTie

The U.S. estate tax and UK inheritance tax both peak at 40%, but the rules work differently.

VAT / sales taxUnited States

The U.S. has no federal VAT, though state and local sales taxes can still apply, while the UK standard VAT rate is 20%.

The verdict

On federal headline rates, the United States usually looks lighter than the United Kingdom. The top federal income tax rate is lower, corporate tax is lower, and long-term capital gains are usually taxed more gently.

The caveat is obvious: the U.S. is not one tax system because states and cities can add income, payroll, sales and property taxes on top. A good federal answer is not always a good real-world answer.

The UK is simpler in one sense and harsher in another: it has a single national tax stack with income tax, National Insurance, VAT and inheritance tax, so the numbers are easier to read but often heavier in practice.

How to read this comparison

The United States and United Kingdom are both high-compliance tax systems, but the U.S. is usually lighter on federal headline rates. State taxes are the big wildcard, so the correct answer depends on where in America you actually live.

Frequently asked questions

Which is lower tax, the US or the UK?

On federal headline rates, the US is usually lower tax. In practice, state taxes can narrow or erase the gap, especially for income, property and business owners; Scottish income-tax rates also differ from the rest of the UK.

Does the United States have a wealth tax?

No federal net wealth tax exists, but estate tax, gift tax, state-level transfer taxes and property taxes still matter.