Introduction

The Autumn Budget 2025 contained a range of changes to raise revenue from individuals, including increasing the rates of tax on savings, dividend and property income, extended freezes to personal tax thresholds and a new surcharge for homes in England worth above £2million. In addition, the amount of both employees’ and employers’ National Insurance Contributions (NICs) relief on salary sacrifice contributions to pensions is to be capped at £2,000 per annum.

The key points relevant to private clients from the Autumn Budget 2025 are summarised below.  

Income tax and National Insurance Contributions (NICs)

• Personal tax thresholds are to be frozen for another three years, until 5 April 2031. This includes the personal allowance and higher and additional rate thresholds, which are to remain as £12,570, £50,270 and £125,140 respectively. This is the biggest revenue raiser of the day and is projected to raise £7.8bn in 2029/30 and £12.4bn in 2030/31.
• NIC reliefs on pension contributions made through salary sacrifice are to be removed for contributions in excess of £2,000 per annum from April 2029. Both employee and employer NICs will apply to pension contributions above this level. The changes are costed to raise £4.7bn in 2029/30 and are one of the biggest revenue raising measures of the day.
• Income tax rates on property, savings and dividend income are to increase by 2%. Property and savings rates will increase by 2% on the basic, higher and additional rate bands from 6 April 2027. Whereas dividend rates will increase by 2% on the basic and higher bands only from 6 April 2026. The savings and dividend nil rate bands will remain nil rates.
• The intention is for the increased rates of property taxation to apply in England and Northern Ireland. The government intend to work with the Scottish and Welsh governments on devolving the rates of taxation applicable to Scottish and Welsh property income in line with existing devolvement agreements.

Enterprise Investment Scheme (EIS) and Venture Capital Trust (VCT) investments

• The annual limits for the size of companies eligible for EIS and VCTs reliefs will double. The increases appear to relate to the size of companies into which investments can be made, with no changes to the amounts individuals can invest each year.
• The rate of income tax relief on VCT investments will reduce from 30% to 20%.
• The government intend to further consider support for entrepreneurs, and have published a call for evidence (available here).

Cash ISA allowance

• The cash ISA allowance will reduce to £12,000 a year from 6 April 2027 for those aged 65 and under, down from £20,000. It will still be possible to invest £20,000 per year in ISAs, but the remaining £8,000 must be invested into a stocks and shares, innovative finance and/or lifetime ISA. The maximum that can be invested in a lifetime ISA remains at £4,000 per year.

High-value council tax surcharge

• A high-value council tax surcharge is to be introduced from April 2028.
• The charge will apply to properties worth £2million or more. The lowest annual charge will be £2,500. The highest annual charge will be £7,500 for properties worth more than £5million.
• The surcharge will apply in addition to existing council tax liabilities. The Budget documents say that the amount of surcharge payable will increase with CPI inflation, but do not say that the value bands will also increase with inflation.
• The charge will initially be based on the value of properties in April 2026, as determined by the Valuation Office.
• The government plan to introduce a deferral scheme for people who cannot pay the surcharge, following a consultation on details of reliefs and exemptions.

Inheritance tax

• The previously announced reductions to inheritance tax business and agricultural property relief are to go ahead from April 2026. A change announced in the Budget is that the £1million 100% relief allowance will be transferable between spouses and civil partners on death. This is a simplification of the rules, and aligns with the operation of the inheritance tax nil rate band.
• The government intend to make changes so that UK agricultural property held by non-UK entities will be treated as UK situated for inheritance tax purposes, increasing tax liabilities for certain non-long-term UK residents and associated trusts. This change is to take effect from 6 April 2026.
• A £5million cap will be applied to inheritance tax relevant property trust charges on excluded property trusts that were set up before 30 October 2024. This is relevant to individuals and associated trusts who were non-UK domiciled under the rules that applied before 6 April 2025. The cap will apply to trust inheritance tax charges from 6 April 2025 (i.e. the cap is backdated).
• Tax charges are to apply where trusts that are only in the scope of inheritance tax on UK sited assets (known as excluded property trusts) change from having UK sited assets to having non-UK sited assets. Under current rules, this is relevant to trusts settled by non-long-term UK resident settlors.
• The government are preparing for the extension of inheritance tax to pensions funds that are currently not in the scope of inheritance taxation, which is due to take effect from 6 April 2027. It was announced in the Autumn Budget 2025 that personal representatives will be able to direct pension scheme administrators to withhold 50% of taxable benefits for up to 15 months and pay inheritance tax due in certain circumstances. Personal representatives will be discharged from a liability for payment of inheritance tax on pensions discovered after they have received clearance from HMRC. 

Closing the tax gap, including rewards for informants

• A further increase in the amount to be raised by closing the tax gap was announced. The government intend to collect an additional £2.4bn from closing the tax gap by 2029/30, increasing the total amount that the government intend to collect from closing the tax gap to £10bn by the end of the Parliament.
• The announcements refer to tax administration, compliance and tax collection.
• Notably, the government have provided further information on a new informants’ reward scheme. HMRC will pay between 15% - 30% of the additional tax collected due to information provided by informants, where at least £1.5million of additional tax is collected. Rewards are given at HMRC’s discretion and are not guaranteed. This change applies with immediate effect.

Writing down allowances for businesses

• Full expensing will continue to be available where it is currently available.
• Changes are to be made to other writing-down allowances which provide tax reliefs for expenditure: a new 40% first-year allowance from January 2026, and a reduction in the general writing-down allowance from 18% to 14% from April 2026. These changes will apply to both self-employed individuals and companies.

Capital gains tax relief and share reorganisations

• Legislation will be introduced in Finance Bill 2025-26 that broadens the anti-avoidance provisions in respect of exemption from capital gains on share reorganisations and exchanges. The proposed changes, that have immediate effect, will expand the targeted anti-avoidance rules such as to deny an exemption where a person has entered into arrangements where the main purpose, or one of the main purposes, of those arrangements was to secure them a tax advantage.

Capital gains tax reliefs on employee ownership trusts

• The capital gains tax relief where shares are sold to employee ownership trusts are to reduce from 100% to 50% with immediate effect from 26 November 2025.