The UK Autumn Budget 2025: What Could Be Coming Next?

Steve Thompson
Oct 11
3 min read

Updated: Oct 15

October 14, 2025

The UK Autumn Budget 2025 will be delivered on 26 November, and with sluggish growth and stubborn borrowing figures, most economists agree that the Chancellor, Rachel Reeves, will have to find new ways to raise revenue while sticking to her fiscal rules.

Speculation is building over where the tax axe might fall, and, given the government’s pledge not to raise income tax rates for “working people,” the focus may shift toward taxing wealth rather than income.

Below is a summary of the key areas that are attracting attention, and how they could impact both UK residents and expatriates.

1. Inheritance Tax (IHT)

Last year’s Budget made sweeping changes to IHT, but more could still come.

There’s talk of tightening gift reliefs, possibly reducing or even removing the current exemptions, and extending the seven-year rule to ten years. Some reports even suggest a lifetime cap on tax-free gifting.

The freeze on the Nil Rate Band and Residence Nil Rate Band is already extended to 2030, but it could go further.

Confirmed from April 2026:

100% Agricultural and Business Property Relief will be capped at £1m, with 50% relief above that.
AIM shares will lose their full IHT exemption and face a reduced 20% IHT rate after two years of ownership.
From April 2027, pensions will fall within the IHT net, meaning inherited pension funds could face combined tax rates approaching 67% if the holder dies after age 75.

2. Pensions

There’s ongoing speculation that the 25% tax-free lump sum (PCLS) could be reduced or capped, with rumours suggesting a limit of £40,000 or a lower percentage entitlement.

No announcements have been made, but the message remains the same: pension decisions should be driven by long-term planning, not short-term headlines.

3. Capital Gains Tax (CGT)

One persistent rumour is that CGT could be aligned with income tax rates, pushing the top rate as high as 45%.

The annual exemption has already been slashed from £12,300 (2022) to £3,000 (2024), and there’s growing talk of a “double death tax” — applying CGT and IHT when assets pass on death.

That would mean taxing capital gains accrued from purchase to date of death (up to 24%), and then levying 40% IHT on the remaining value.

4. Other Investment Taxes

Dividends: The dividend allowance could disappear entirely, or rates could be lifted.
ISAs: There’s discussion of reducing the cash ISA limit while maintaining equity ISA incentives to drive investment in UK markets.

5. Income Tax Thresholds

While the government is unlikely to raise income tax rates, it may extend the freeze on thresholds beyond 2028.

This “stealth tax” has been one of the most effective revenue-raisers in recent years, pulling millions more earners into the 40% band. The OBR estimates that extending the freeze to 2030 could raise an extra £48 billion.

6. Landlords and Rental Income

Buy-to-let investors have already felt the squeeze, but the next step could see rental income taxed like employment income — including possible National Insurance Contributions or full alignment with PAYE rates.

7. Wealth Tax & Property Levies

Talk of a wealth tax has resurfaced, with some MPs proposing a 2% annual levy on assets over £10m, potentially raising £24 billion a year.

More likely, the Chancellor could opt for a property-based wealth tax — for instance, replacing stamp duty with an annual property tax on high-value homes, or even amending the CGT exemption for primary residences over a certain value.

What It All Means

The Chancellor faces a balancing act: finding additional revenue while avoiding political fallout. With defence, healthcare, and infrastructure budgets all demanding funding, taxing wealthier households and investors may be seen as the least politically painful route.

For British expatriates, this is not something to ignore. The recent IHT inclusion of pensions and the QROPS transfer tax show how easily cross-border investors can get caught in the net.

Looking Ahead

While many of these changes remain speculative, history shows that Budgets can spring surprises — and those surprises can apply immediately.

Now is the time to review your financial position. Whether you’re planning to leave the UK, already living abroad, or simply looking to protect what you’ve built, proactive advice can make a world of difference.

I spend my time helping British expatriates structure their wealth efficiently and plan ahead for legislative change.

If you’d like to discuss your plans, feel free to reach out.