Autumn Budget 2025: What It Means for Your Wealth, Property and Business
Kelly Goodchild, Senior Tax Manager, Streets
THE Chancellor’s second Autumn Budget raises revenue through a series of targeted, largely “stealth” tax measures. While core income tax rates stay the same, several significant changes will affect landlords, investors, business owners, and high-net-worth individuals:
- New Property Income Tax Regime (from April 2027)
Property income will be taxed separately at new rates of 22%, 42%, and 47%. Mortgage interest relief continues, but only as a 22% tax credit. Incorporation may seem more appealing, but HMRC scrutiny is tightening: from April 2026, CGT Incorporation Relief must be claimed rather than applied automatically, and commercial justification remains essential.
- Higher Taxes on Dividends and Savings
Dividend tax rates rise by 2 percentage points from April 2026 (10.75% and 35.75%; the 39.35% additional rate unchanged).
From April 2027, savings income adopts the new property income bands of 22%, 42%, and 47%. ISAs become more important, though the cash ISA limit drops to £12,000 for under-65s, increasing reliance on Stocks & Shares ISAs.
- Inheritance Tax Relief Changes
Business Property Relief and Agricultural Property Relief, previously offering up to 100% relief, will be capped at £1m combined from April 2026. However, this allowance can now transfer to a surviving spouse, making accurate valuations and eligibility reviews crucial for farms and family businesses.
- Salary Sacrifice Restrictions (from April 2029)
Only the first £2,000 of pension contributions made via salary sacrifice will be exempt from National Insurance. Contributions above this limit will attract standard NIC, reducing flexibility for higher earners while keeping pensions central to long-term planning.
- Employee Ownership Trust (EOT) Relief Cut
From 26 November 2025, the current 100% CGT exemption on qualifying sales to EOTs will be halved: only 50% of the gain will be free from CGT. Those who have not already completed an EOT transfer must now plan under the reduced relief or consider alternative succession routes.
- Fiscal Drag
Income tax thresholds remain frozen until 2031, pushing more taxpayers into higher bands as incomes rise. Combined with the wider set of tax increases, the national tax burden is set to reach a 70-year high of around 38% of GDP.
Overall Impact
Landlords should reassess portfolio viability; business owners may need to adapt remuneration strategies; wealthy individuals must revisit estate planning; and investors should maximise ISA use. The Budget clearly pivots towards taxing wealth and passive income, making early planning essential. If you’d like to discuss how these changes affect you, get in touch today by emailing info@streets.uk.
