Autumn Budget Update: What Actually Happened
In the weeks leading up to the Budget, there were headlines predicting sweeping reforms: a major overhaul of Capital Gains Tax, a broad new “wealth tax”, significant restrictions on pension planning, and increased tax on property owners.
Yesterday’s Budget did deliver a material tax-raising package, but not the radical restructuring many thought might be coming.
Here is a quick run through of some key measures in response to my previous article.
More details will come and there will be consultations. We will keep you updated on developments and thoughts. Do get in touch to discuss how these changes will impact you and see how we can help with succession and asset protection.
Income Tax & Thresholds
Reported: That there might be big increases in tax rates or sweeping income-tax changes.
What was actually announced:
- The government did not raise headline income-tax rates.
- Instead, they extended the freeze on personal tax and National Insurance thresholds until 2031 — meaning as incomes rise (with inflation, pay rises, bonuses etc.), more people are gradually pushed into higher tax bands (“fiscal drag”)
Verdict: This is a stealth-style tax increase. Over time, many working individuals will feel the bite even without a headline rate change.
“Mansion Tax”
Reported: Speculation of a broad new wealth tax or major CGT/wealth-tax overhaul, maybe targeting properties heavily.
What was actually announced:
- The Budget introduces a High-Value Council Tax Surcharge (often dubbed a “mansion tax”) for residential properties valued over £2 million — with an annual surcharge of £2,500 for homes just over £2m, rising to £7,500 for those above £5m.
Verdict: While the broad wealth tax overhaul rumours did not materialise, there is a real wealth and property-targeted measure — but limited in scope. Those owning more valuable properties and those with investment/savings income will see meaningful tax increases.
Pensions & Planning (Salary Sacrifice, Reliefs)
Reported: Warnings about potential pension reforms on tax-efficient pension/contribution schemes.
What was actually announced:
- The Budget caps the amount of pension contributions via salary sacrifice that are exempt from National Insurance: from April 2029 only the first £2,000/year per person will retain the National Insurance relief benefit.
Verdict: Pension-strategies relying on salary sacrifice will need revisiting — this is a real structural change.
Income from Investments, Savings, Dividends
Reported: Predictions varied, but some speculation touched on potential tax on “passive wealth,” capital gains, or savings/investment income.
What was actually announced:
- Taxes on dividend income, savings interest and property income will increase: dividend and basic/upper-rate savings/property-income taxes rise by 2 percentage points in coming years.
- The Budget also reduced certain reliefs: for instance, relief on disposals to Employee Ownership Trusts (EOTs) is cut — a move to limit some tax-efficient capital-gains strategies.
Verdict: Individuals relying on such income streams, returns after tax will reduce.
Stay tuned for further updates as more detail emerges. If you would like to discuss how any of these changes may affect you or need support with succession planning or asset protection, please feel free to contact me directly.
