Income Tax
- Rates unchanged for earned income, however all bands are frozen until April 2031. As wages and investment income rise, fiscal drag will push more individuals into higher bands. Action: Review your projected income and consider tax-efficient strategies such as pension contributions, using spouses’ allowances and charitable gifting.
- Dividend income: From April 2026, dividend tax rates rise by 2%: basic rate: 10.75%, higher rate: 35.75%. Action: Review portfolio structures and consider using ISAs or pensions to shelter dividend income.
- Savings income: From April 2027, the tax on savings income (including cash interest) will rise by 2% to 22%, 42% and 47% for basic, higher and additional rate taxpayers respectively. Action: Maximise tax-free wrappers (ISAs, pensions), utilise personal allowances, and re-assess cash allocations.
- Rental income: From April 2027, tax on rental income will also rise by 2%, to 22%, 42% and 47% for basic, higher and additional rate taxpayers respectively. Action: Review property-related cash flow and ownership structures.
Inheritance Tax (IHT)
- No changes to thresholds; Nil Rate Band remains at £325,000. Action: Consider estate planning strategies such as use of exemptions and reliefs, lifetime gifting and trusts to mitigate future IHT exposure.
Cash ISAs
- ISA rules will change from April 2027. The full £20,000 ISA allowance remains, however subscriptions into Cash ISAs will be limited to £12,000 for those under 65. The remaining £8,000 can be invested in a Stocks and Shares ISA. This change in ISA rules will not be applicable to over 65s; the full £20,000 Cash ISA allowance remains. Action: Continue to use your ISA allowance and plan ahead for rule changes.
Pensions
- Salary Sacrifice: From April 2029, Salary Sacrifice pension contributions above £2,000 per annum will no longer be exempt from National Insurance (NI). Contributions over this limit will be subject to employee and employer NI. Action: Continue using Salary Sacrifice while available and review pension funding strategy before changes take effect.
State Pension
- From April 2026, State Pension rises by 4.8% under the triple lock. Full entitlement will be £12,547.60 per annum. Action: Check your State Pension forecast via Check your State Pension forecast - GOV.UK.
Council Tax Surcharge
- From April 2028, an annual council tax surcharge will apply to high-value properties, ranging from £2,500 for homes valued at £2m to £7,500 for those over £5m. Action: Confirm valuation bands and revisit long-term property-ownership plans.
Please note: This summary reflects our initial interpretation of the Autumn Budget announcements. The measures outlined may be subject to change following consultation and detailed legislation.
