Autumn Budget 2025: key takeaways

The Autumn Budget was unveiled last week with measures announced that will impact individuals, business owners, and landlords. Whilst the changes perhaps weren’t as significant as many expected, there are still some important considerations to make and proactive planning is advised.

The Chancellor stated that her aims were to give relief to working families, invest in the economy to stimulate growth, cut debt and borrowing, and invest in the NHS and education.

Here, we highlight some of the key changes you should be aware of.

What does the Autumn Budget mean for you?

Individuals

• Agricultural Property Relief (APR) and Business Property Relief (BPR): The £1m cap on the 100% rate of APR and BPR won’t increase but any unused 100% relief will be transferable to the surviving spouse, though we await further details on the exact conditions under which this can be used.
• Stealth tax: There is no change to the income tax rates on ‘actively earned’ income, but a stealth tax will be introduced instead, with income tax thresholds and the employer National Insurance contributions threshold remaining frozen for a further three years, until 2031.
• Dividend and savings income tax: There will be a two-percentage point rise in the basic and higher rates of dividend income tax from April 2026, with the additional rate remaining unchanged. There will also be a two-percentage point rise in the basic, higher and additional tax rates on savings income from April 2027.
• Pension contributions: From April 2029, there will be a £2,000 cap on the amount that can be put into a pension and shielded from National Insurance contributions through salary sacrifice.
• Pensions and IHT: Featured in the Budget but not covered in the Chancellor’s speech was a small change to future pension rules allowing personal representatives to direct pension administrators to withhold 50% of taxable death benefits in order to pay inheritance tax. This change will take effect from 6 April 2027 when pensions become subject to inheritance tax.
• Cash ISAs: The annual Cash ISA allowance will be reduced to £12,000 for under 65s. This will come into effect in April 2027. Over 65s will retain a £20,000 cash allowance.
• Electric and hybrid vehicles: Electric and plug-in hybrid vehicle owners will be subject to a new tax per mile from April 2028, with 3p per mile for pure electric vehicles and 1.5p per mile for hybrids.

Business owners

• Corporation tax: Rates of corporation tax will remain the same for now, with the £1m Annual Investment Allowance being retained to offer immediate tax relief on plant and machinery equipment.
• Capital gains tax relief (CGT): CGT relief on shares sold by business owners to Employee Ownership Trusts will be halved. The decision to restrict employee ownership trust capital gains tax relief from 100% to 50% comes because the scheme is on course to cost £20bn, 20 times the original estimate
• Entrepreneurs: There will be an expansion of entrepreneurial investment schemes and a three-year stamp duty holiday on the transfer of shares in companies newly listed in the UK.
• National minimum and living wages: The national minimum wage for 18- to 20-year-olds will go up from £10 to £10.85 an hour from April, while the national living wage will go up from £12.21 to £12.71 an hour.

Landlords

• Property income tax: There will also be a new separate tax on property income with the introduction of a 22% basic rate, 42% higher rate and 47% additional rate of property income tax from April 2027.
• High Value Council Tax Surcharge: A council tax surcharge will be introduced on properties valued over £2 million starting from April 2028. The surcharge ranges from £2,500 to £7,500 a year across four price bands and will be payable by property owners rather than the occupiers.

Professional legal expertise

If you want advice or clarity on any of the measures announced in the Autumn Budget, and how these might impact your affairs, business, or estate, please get in touch with Lodders’ expert lawyers who will be happy to help.