UK Autumn Budget 2025 - top 10 tax takeaways

Here are our top 10 tax takeaways from the UK Autumn Budget delivered by Chancellor Rachel Reeves:

1. Allowances and thresholds: The personal allowance has been frozen at £12,570 for a further three years to April 2031. The Income Tax higher rate threshold (£50,270) and National Insurance thresholds (£12,570 and £50,270) will also remain at their current levels until April 2031.
   
   
2. Income Tax rates: Income Tax rates for savings and property income from 6 April 2027 will rise by 2% to 22%, 42% and 47% while dividend income rates will rise from 5 April 2026 to 10.75% and 35.75% but the additional rate will remain at 39.35%. Income Tax reliefs and allowances will need to be applied against other income before they can be used against property, savings and dividend income. Property income received by Scottish residents is subject to Scottish rates of tax. The UK Government will consult with the Scottish Government on implementing this.
   
   
3. Pension contributions and salary sacrifice: Employer and employee NICs will be chargeable on pension contributions above £2,000 per annum made via salary sacrifice from April 2029 but the 25% tax free allowance is retained.
   
   
4. High Value Council Tax Surcharge (HVCTS): A new Council Tax surcharge, the HVCTS, is to be introduced in England from April 2028. The much trailed “mansion tax” will be £2,500 per year for residential properties worth £2 million or more, and £7,500 for properties valued above £5 million, based on updated property valuations. The new levy will be paid by owners rather than occupiers and will be collected by local authorities alongside existing Council Tax. As Council Tax is a local tax this will apply in England only, and it will be for the Scottish, Welsh and Northern Ireland Governments to decide whether to introduce a similar measure.
   
   
5. Capital Allowances: There are some tweaks to Capital Allowances on main rate pool items. Firstly, a new 40% First Year Allowance (FYA) is available from 1 January 2026 for new and unused main rate pool plant and machinery, including leasing assets. Unlike the existing full expensing rules, this new FYA is available to income taxpayers. Unlike the Annual Investment Allowance (AIA), no annual cap is mentioned for the 40% rate. The AIA can apply to second-hand plant and machinery as well as most special rate expenditure. From the 2026/27 tax year onwards, annual writing down allowance for main pool assets is also reduced to 14%.
   
   
6. Inheritance Tax: Among various small changes made to Inheritance Tax, the surprising stand-out is that unused amounts of the £1 million 100% relief limit for business and agricultural property is to become transferable between spouses/civil partners, as is the case with the basic and residential IHT nil rate bands – but there is no rowing back on the basic reform to APR and BPR announced last year and coming into full effect in April 2026. There is a further welcome change at least to the administration and allocation of the tax on unused pension funds to be introduced in April 2027; and more complex changes in relation to non-UK property, non-long-term residents and trusts. A less welcome change is a further freeze in the basic and residential nil-rate bands for yet another year into 2030-31.
   
   
7. Enterprise Management Incentive (EMI): The eligibility limits for EMI share option schemes will be increased from April 2026 and the maximum holding period for EMI options is also increasing from 10 years to 15. The requirement to notify the grant of EMI options will also be removed from April 2027.
   
   
8. Venture Capital Trust (VCT) and Enterprise Investment Scheme (EIS): The government announced an increase to the VCT and EIS company investment limits to £10 million, as well as changes to the gross assets tests for each.
   
   
9. UK Listing Relief: A new relief from 0.5% Stamp Duty Reserve Tax (SDRT) will apply to transfers of a UK-listed company’s securities for three years from the date of listing, with effect from 27 November 2025.
   
   
10. Capital Gains Tax: A number of tweaks were also announced to Capital Gains Tax. From today’s date, the relief available on sale of a business to an Employee Ownership Trust is reduced to 50%, the government is given the ability to amend the anti-avoidance powers applying to share exchanges and corporate reorganisations, and non-resident CGT anti-avoidance rules applying to cell companies are introduced with the expectation that more will now be classed as “land rich companies”. From 6 April 2026 individuals wishing to use incorporation relief when transferring a business to a company will need to claim the relief in their self-assessment returns.

For further updates, visit our UK Budget Hub or contact one of our tax experts below, or your usual Brodies contact for more information on how these new developments may impact you or your business.