After many weeks of conjecture and hand-wringing, the Autumn Budget was delivered on 26 November. The anticipation was palpable, but was it as bad as we expected?

The dreaded ‘exit tax’ for individuals leaving the UK did not materialise, and there were no further substantial changes to the inheritance tax or capital gains tax regimes. Similarly, the anticipated changes to national insurance contributions for partners of LLPs were not announced.

Personal Tax Changes: What’s New?

We expected the extension of frozen income tax thresholds until 2031, bringing more taxpayers into the higher rate band. The Office for Budget Responsibility has projected additional tax revenue of £23bn by 2030/31.

After much speculation about a 2% income tax increase, this was restricted to investment and property income. The increase applies to the basic and higher rates of dividend income (although the additional rate remains at 39.35%) from April 2026, and to savings income, with the 2% increase on all income tax bands, from April 2027.

The cash ISA limit is to be reduced to £12,000 from April 2027 for under-65s, although the £20,000 total limit remains – savers can invest the balance of £8,000 in stocks and shares ISAs. The rationale for this is to encourage savers to invest, rather than simply save as cash, thereby boosting the economy, but some commentators believe this may backfire and instead discourage savers.

For employees who contribute to their pension via a salary sacrifice scheme, income tax relief will be limited to only £2,000 per year from April 2029. It is anticipated that this will raise £4.7 billion in 2029/30 and £2.6 billion in 2030/31.

‘Mansion Tax’: Council Tax Surcharge Explained

It feels as if this has been a long time coming and has now been introduced as a surcharge on Council Tax that will apply from April 2028 for residential property valued at £2m or higher (as valued in 2026). HMRC has said

‘The Valuation Office will conduct a targeted valuation exercise to identify properties above £2 million and therefore in scope. Fewer than 1% of properties in England are expected to be above the £2 million threshold. Revaluations will be conducted every five years. ‘

Additional charges from April 2028:

£2,500 for properties worth £2m–£2.5m
£3,500 for £2.5m–£3.5m
£5,000 for £3.5m–£5m
£7,500 for £5m–£7.5m

The projected tax forecast is £400m a year from 2028/29.

Inheritance Tax: Did anything change?

There were no significant amendments to the current inheritance tax regime (including no extension of the gifting run off period from seven years to ten).

The nil rate band and residential nil rate band will be frozen until 2031, with a projected additional tax take of £130m.

Minor changes were made to tax on certain high-value offshore trusts, including the introduction of a £5m cap on relief..

Many clients will be most interested in the changes to the applicability of agricultural and business property reliefs announced in the previous Budget and due to be implemented in April 2026. The allowance of £1m is frozen until 2031 and can now be transferred between spouses and civil partners.

There was no U-turn on the previously announced new legislation enabling HMRC to look through a non-UK company which holds UK agricultural land and buildings – these assets will be treated as UK situated assets and therefore in the inheritance tax net, similar to existing transparency for UK residential property in offshore entities.

Similarly, there were no amendments to the new measures bringing unused pension funds and some death benefits within the value of a deceased’s estate for inheritance tax from 6 April 2027.

Enterprise Investment Schemes, Venture Capital Trusts and Employee Ownership Trusts

The investment limits will be increased for EIS and VCT, but VCT income tax relief will decrease. Capital gains tax relief on disposals to Employee Ownership Trusts will reduce from 100% to 50% with immediate effect.

Compliance Powers

Penalties for late submission of corporation tax returns will be doubled. There will be new measures to help HMRC curb promotors and facilitators of tax avoidance schemes, and some anti-avoidance provisions involving share reorganisation reliefs will be modernised.