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On the 27th November 2025, Chancellor Rachel Reeves delivered the long-anticipated Autumn Budget. Focused on raising revenue for the treasury, the new tax measures were extensive, and the main points that may affect our clients are summarised below.
Housing and Property
Despite speculation, there were no changes to Stamp Duty Land Tax. A High Value Council Tax Surcharge (dubbed the “mansion tax”) will apply to owners of residential properties valued at £2 million or more from 1 April 2028. The surcharge, between £2,500 and £7,500 per annum based on value, will be collected alongside council tax.
For landlords, the income tax rates on property income will increase by 2% to 22% for basic rate, 42% for higher rate, and 47% for additional rate taxpayers, from April 2027.
Personal Taxation
The income tax personal allowance, and thresholds for higher rate and additional rate tax, have been frozen again until April 2031. Whilst this is not a tax increase per se, an increasing number of taxpayers will be brought into the higher bands within that time.
For savers, the income tax rates for savings income will increase by 2% for each of the bands (22%/42%/47%), from April 2027. Those receiving dividends will be taxed at 10.75% for basic rate taxpayers, and 35.75% for higher rate taxpayers, again an increase of 2%, from April 2026.
The cash ISA allowance will reduce to £12,000 from April 2027. The remaining £8,000 can still be invested in an investment ISA. This will not apply to those over 65, who will retain the full £20,000 ISA allowance to allocate to cash or investment ISAs as they see fit.
Benefits and Pensions
The two-child benefit cap has been removed, meaning that payments will be applicable to families with more than two children from April 2026.
The “triple lock” for state pensions remains, and means that state pensions will increase by 4.8%, in line with average wage growth, from April 2026.
Salary sacrifice rules for pension contributions will be limited, meaning that National Insurance will be applicable to pension contributions in excess of £2,000 per year, from April 2029.
Inheritance Tax
The inheritance tax (“IHT”) nil rate band of £325,000 and the residence nil rate band of £175,000 have been frozen for an additional year until April 2031. This will bring more estates within the scope of IHT.
The £1 million limit applicable to Business Property Relief and Agricultural Property Relief introduced last year remains in place despite opposition and will apply from April 2026. This limit will be transferrable between spouses.
Plans to include unused pension funds within the scope of IHT on death remain and will apply from April 2027.
As a welcome change, victims of the Infected Blood scandal will not suffer IHT on their compensation payments. If the claimant has already died, an IHT credit equal to the value of the compensation will apply to the living recipient of the payment, and there will also be options to enable the recipient to gift the compensation payment to another with the benefit of the IHT credit.
Whilst this is a short summary of the changes that may affect clients of Churchers, the rules themselves are complex. You will need to discuss your own circumstances with your advisers. If you are unsure as to how these changes might affect you and your plans, please get in touch with us – we are here to assist you in planning for your future.
Jessica Measham, Partner
27 November 2025