The UK’s 2025 Autumn Budget, delivered by Labour Chancellor Rachel Reeves on 26 November 2025, set out the government’s latest plans to tackle the cost of living, support public services and raise revenue through changes to wealth, property and investment taxation.
For many people, the impact won’t be felt immediately. Most measures are due to take effect between 2026 and 2031, which means there is time to understand what the changes mean for your family, your estate, your business and your future plans. But with frozen thresholds, rising property values and several earlier reforms still in play, it’s becoming even more important to keep legal arrangements such as Wills, LPAs, financial orders, property ownership and business plans up to date.
We know budgets can feel overwhelming, especially when the rules touch on sensitive areas like inheritance, family finances or your ability to plan ahead. Our solicitors are here to help you make sense of the legal implications and support you where it matters most.
How GloverPriest can help
If you’re unsure how the 2025 Budget could affect your Will, estate plans, family arrangements, business or property portfolio, our team can talk things through with you in clear, practical terms. We’ll explain your legal options and help you take the right steps.
What Happened In The Budget Today - 26th November 2025 Overview
The Autumn 2025 Budget sets out a wide range of tax and welfare measures, many of which will come into effect gradually over the next few years. While the government has kept headline income tax, VAT and National Insurance rates unchanged, several reforms will still have a noticeable impact on property owners, families, savers and business owners.
The key points include:
- Higher tax rates on property, savings and dividend income, increasing by two percentage points from April 2026 and April 2027, meaning people with rental income, share dividends or interest on savings may see a higher overall tax bill.
- A new high-value council tax surcharge for properties worth more than £2 million, starting in April 2028.
- Inheritance Tax thresholds frozen until 2030/31, alongside earlier changes to business and agricultural relief.
- Pension salary sacrifice capped for National Insurance savings from April 2029. This means employees will only be able to save NI on the first £2,000 of salary-sacrificed pension contributions each year, with anything above that treated like normal pension contributions.
- Cash ISA allowance reduced from £20,000 to £12,000 in April 2027, but only for those under 65.
- Abolition of the two-child limit for the Child Element in Universal Credit from April 2026, with related changes expected to follow across the wider welfare system as regulations are updated.
- National Living Wage and National Minimum Wage increases
- Funding to make apprenticeships free for SMEs
- New per-mile duty on electric and plug-in hybrid vehicles
- Fuel duty frozen until 31 August 2026, with staged increases planned from September 2026.
- Business measures, including an increase to remote gaming duty and new incentives for businesses listing in the UK.
- Targeted regional investment, with funding for Wales, Scotland and Northern Ireland, plus new AI growth zones in Wales.
Many of these changes build on measures already announced in previous budgets. When combined with frozen thresholds and rising property values, they underline the importance of keeping legal arrangements around your estate, home, family finances and employment rights up to date.
Earlier Tax Changes Still in Force – What Hasn’t Gone Away
Alongside this year’s announcements, several important measures from previous budgets remain in place. Many of these changes are already shaping how families plan their estates, structure their savings or think about passing property or a business to the next generation. The key points include:
- Corporation Tax remains capped at 25% for the rest of this Parliament, as confirmed in the government’s longer-term tax plans. This mainly affects owner-managed businesses and anyone thinking about succession or a future sale.
- Personal tax thresholds are already frozen until April 2028, and this freeze has now been extended to April 2031. As wages rise over time, more people are pulled into higher tax bands, increasing the overall tax burden.
- Inheritance Tax thresholds stay frozen until at least 2030/31, meaning the nil-rate band (£325,000) and residence nil-rate band (£175,000) are unchanged. With property values continuing to rise, more estates are becoming taxable even when families don’t feel “wealthy”.
- Capital Gains Tax Business Asset Disposal Relief (BADR) will rise from 14% to 18% from April 2026, increasing the tax paid when business owners sell qualifying assets.
- Agricultural and Business Property Relief (APR/BPR) will be capped at a combined £1 million from April 2026, with any excess above that receiving 50% relief. This is particularly relevant for family businesses and farms being passed to the next generation.
- Defined contribution pension pots will fall within the scope of IHT from April 2027, subject to specific reliefs. For some families, this changes how pensions are used as part of wider inheritance planning.
- Payrolling of benefits-in-kind becomes mandatory from April 2027, meaning most workplace benefits will be taxed through payroll rather than through end-of-year P11D reporting.
- Making Tax Digital for Income Tax begins from April 2026, starting with sole traders and landlords with income above £50,000, before rolling out more widely. This may affect how rental income, business income and deductible expenses are recorded.
Taken together, these earlier reforms mean that many households are carrying a higher tax burden even before this year’s measures take effect. It’s another reminder to review Wills, LPAs, residential and commercial property arrangements and long-term plans to ensure everything still aligns with your wishes.
Property, Council Tax and Investment Income – Homeowners and Landlords
Several Budget measures will affect people who own property, receive rental income or rely on savings and dividends as part of their household finances. These changes won’t come in all at once, but they are worth keeping in mind if you’re planning to buy, sell, transfer or pass on a property in the coming years.
Higher tax rates on property, savings and dividend income
From April 2026 and April 2027, the tax rates on property income, savings interest and dividends will rise by two percentage points. For landlords and investors, this means rental income, interest on savings and share dividends may be taxed at a higher rate than before. While the increase is relatively small, it may still influence decisions around portfolio management, gifting property or passing assets on as part of your estate planning.
Council tax surcharge for homes over £2 million
From April 2028, a new high-value council tax surcharge will apply to residential properties worth more than £2 million. The surcharge begins at £2,500 per year and rises to £7,500 for homes valued above £5 million. Although this affects a limited number of households, it may be relevant for clients who own high-value properties or are considering transferring a family home to children or other relatives.
What this means in practice
When combined with frozen inheritance tax thresholds and previous changes to business and agricultural reliefs, these reforms place more emphasis on how property is owned, transferred and managed. If you are thinking about selling a rental property, gifting a home to a family member or updating your Will to account for changing property values, it may be sensible to review your plans sooner rather than later.
How GloverPriest can help
Whether you’re buying or selling a property, transferring ownership within the family or dealing with a rental portfolio as part of your wider estate, our Residential and Commercial Property teams can help you understand the legal side of these decisions. Our specialist Wills, Trusts, LPA and Probate solicitors can also support you with estate planning if property forms a significant part of your assets.
Inheritance Tax, Estates and Lifetime Gifts
Inheritance Tax continues to be an area where earlier reforms and new measures overlap. With thresholds frozen and property values still rising, more families are finding themselves within the IHT system even when they don’t consider their estate to be particularly large. The 2025 Budget keeps this direction of travel in place.
IHT thresholds remain frozen until 2030/31
The nil-rate band (£325,000) and the residence nil-rate band (£175,000) will stay frozen until at least 2030/31. These allowances have not increased for many years, so the real value of the thresholds continues to fall. As a result, estates that may not have been taxable a few years ago could attract IHT in the future, especially where there is a family home involved.
For couples, the ability to transfer unused allowances remains unchanged, meaning up to £1 million can still pass to direct descendants tax-free when both bands are fully available. However, frozen thresholds mean more families may need to think about how their assets are structured.
Changes to business and agricultural relief
From April 2026, the combined amount of Agricultural Property Relief (APR) and Business Property Relief (BPR) that can be claimed at 100% will be capped at £1 million per person. Any value above this limit will qualify for 50% relief instead of full exemption. This matters for family businesses, farms and estates where property and business assets are intended to pass to the next generation.
Pension pots moving into the IHT net from April 2027
Defined contribution pension pots will begin falling within the scope of IHT from April 2027, subject to certain reliefs and exemptions. Pensions have traditionally been seen as a tax-efficient asset to leave behind, so this shift may affect how people balance their estate between property, savings and pension benefits.
What didn’t change – the seven-year gifting rule
There had been a lot of speculation ahead of the Budget that the government might extend the seven-year rule for potentially exempt transfers to ten years. This would have significantly affected people planning larger lifetime gifts, particularly older business owners preparing to retire and hand over assets.
Thankfully, no such change was announced, and the seven-year rule remains in place.
Why this matters for your estate planning
When you bring all these measures together, the direction is clear: more estates are likely to be caught by IHT unless plans are reviewed and updated. Even simple things like how your home is owned, how pensions are structured, or when gifts are made can make a meaningful difference.
How GloverPriest can help
If you’re concerned about how these changes might affect your estate, our Wills, Trusts, LPA and Probate solicitors can review your current arrangements and help you plan in a way that reflects your wishes. We work alongside your financial adviser where needed to make sure your legal documents give you the protection and clarity you need.
Pensions, ISAs and First-Time Buyer Considerations
Several Budget measures focus on long-term saving and retirement planning. While these changes are mainly financial rather than legal, they can still influence decisions around estate planning, family support and future property purchases.
Cash ISA allowance reduced from April 2027
From 6 April 2027, the annual allowance for cash ISAs will fall from £20,000 to £12,000 for most savers. The total ISA limit of £20,000 remains available, but only if the remaining £8,000 is placed in a stocks and shares ISA.
People aged 65 and over are exempt from the cash ISA reduction, so their allowance remains unchanged.
This may affect how younger buyers save for a deposit, or how families structure gifts towards a first home.
Future changes to first-time buyer support
The government will consult in 2026 on a new, simpler ISA-style product for first-time buyers. Lifetime ISAs (LISAs) have historically helped younger buyers save for a deposit, but the Budget signals that the scheme is likely to be replaced with a more streamlined alternative.
If you’re planning to help a child or family member purchase their first property, it may be worth keeping an eye on how the replacement scheme develops.
Pension salary sacrifice cap from April 2029
From April 2029, employees will only be able to save National Insurance on the first £2,000 of pension contributions made through salary sacrifice each year. Any contributions above this will be treated like ordinary pension contributions.
This change is aimed at higher earners who use salary sacrifice extensively, but it can also affect financial settlements on divorce and wider estate planning where pensions make up a significant portion of someone’s assets.
What this means in practice
Although these changes don’t require immediate action, they may influence how you support children onto the property ladder, how you balance cash savings with other assets, or how pensions fit into your long-term planning.
How GloverPriest can help
If pensions, ISAs or other savings form a key part of your Will, estate planning or support for family members, our private client solicitors can help ensure your legal arrangements reflect your wishes.
Families, Benefits and Child Poverty Measures
A number of the Budget’s welfare changes are designed to support low-income households and ease financial pressure on families. While these measures aren’t strictly legal changes, they can affect child maintenance, financial settlements and the wider stability of family arrangements.
Two-child benefit cap scrapped
The government will remove the two-child limit for Universal Credit and Tax Credits from April 2026. This will increase support for many larger families, including separated parents who rely on benefits to manage day-to-day costs. While it doesn’t change how the Child Maintenance Service calculates maintenance, it can affect wider financial stability, which often feeds into separation discussions and financial agreements.
For families going through separation or divorce, the change may influence:
- What feels achievable within a household budget
- How parents approach negotiations about financial support
- The practical arrangements needed to support children
Help to Save scheme and support for lower-income households
From April 2028, the Help to Save scheme will become permanent, with wider eligibility for people on universal credit. This gives qualifying households a government-backed incentive to put money aside, helping create more stability during difficult periods.
For separated parents or those rebuilding after a relationship breakdown, having access to schemes like this can make a real difference to long-term financial resilience.
How GloverPriest can help
If you’re separating, reviewing child maintenance, or considering a financial settlement, and you’re unsure how the removal of the two-child limit might affect your overall position, our Family Law solicitors can talk things through with you. We’ll help you understand the practical impact on your finances and guide you towards arrangements that support your children’s wellbeing.
Business Owners and Company Directors – Succession, Exit and Personal Risk
Several measures in the Budget build on earlier reforms affecting small business owners, directors and family-run companies. While these changes are largely financial, they can have knock-on effects on succession planning, shareholder arrangements and future exit strategies.
Corporation Tax capped at 25% for this Parliament
The government has confirmed that Corporation Tax will remain at 25% for the duration of this Parliament. For many owner-managed businesses, this provides some stability, but it may still influence how and when owners choose to sell, bring in new shareholders or pass the business on to the next generation.
Capital Gains Tax changes for business owners
From April 2026, the rate of Business Asset Disposal Relief (BADR) will rise from 14% to 18%. This increases the tax payable when business owners sell qualifying shares or assets. While the relief remains valuable, the higher rate means some owners may want to reconsider the timing or structure of a future sale.
Business and Agricultural Property Relief capped from April 2026
As part of earlier reforms, the combined amount of Agricultural Property Relief (APR) and Business Property Relief (BPR) available at 100% will be capped at £1 million per person, with any excess qualifying for 50% relief. This matters for family businesses or farms being handed down through generations, where asset values often exceed the threshold.
Other measures affecting business planning
The Budget also includes wider changes such as an increase to remote gaming duty, support for companies listing in the UK, and regional investment incentives. While not directly legal issues, these measures may affect how businesses plan growth, manage risk or structure future investment.
What this means in practice
For many business owners, these reforms emphasise the importance of having up-to-date legal documents in place. That may include a shareholders’ agreement, partnership agreement, business LPA, or succession plan that sets out what should happen if someone retires, becomes unwell or wants to leave the business.
How GloverPriest can help
If you’re considering succession, preparing for a future sale or reviewing how your business would operate if a key person stepped back, our solicitors can help you put the right legal protections in place. We work with families and business owners to ensure their personal and commercial plans stay aligned.
Get in touch with our expert:
Final Thoughts – Planning Ahead After the 2025 Budget
The 2025 Budget builds on several years of frozen thresholds and earlier tax reforms, so even though many of the changes won’t take effect until 2026 or later, the overall direction is already clear. Property, savings, pensions and long-term assets are carrying more of the weight, while rules around family support and working households continue to evolve.
For most people, this is a reminder to check that your legal arrangements still reflect your wishes - whether that’s your Will, your LPA, how your home is owned, or the plans you have in place for your family or business. A small change now can prevent problems later, especially when the financial landscape is shifting.
Taking some time to review your arrangements can give you clarity and peace of mind, and make sure the decisions you’ve already made continue to protect the people who matter most.
How GloverPriest Can Help
When rules change gradually over several years, it can be difficult to know whether your current plans still work for you, your family or your business.
If you’re thinking about updating your Will, reviewing your estate, buying or selling a property, or you’re dealing with business changes, our solicitors are here to offer clear, practical guidance. We can help you:
- Review and update Wills, Trusts, LPAs and estate plans
- Understand the legal impact of changes affecting your home or rental property
- Resolve issues around divorce, child arrangements or financial settlements
- Protect your family business with the right succession and shareholder documents
We’ll always explain your options in plain English and help you choose the approach that feels right for your circumstances. For tailored advice:
If you’d like to read the published Budget 2025 in its entirety, visit the Government Portal here.
Labour Budget 2025 – FAQs
When is the budget 2025?
The Autumn Budget 2025 was delivered by Chancellor Rachel Reeves on Wednesday 26th November 2025. This set out the government’s tax and spending plans for the year ahead, including changes affecting property, savings, pensions and family support.
When is the next Budget?
The next major fiscal event is expected to take place in Spring 2026, although the exact date has not yet been confirmed. Spring Budgets usually cover updated economic forecasts and any further tax changes the government intends to bring in.
Will the 2025 Budget increase the tax I pay on my home or rental property?
It may do, depending on your circumstances. Tax rates on property income will rise by two percentage points from April 2027, and a new council tax surcharge will apply to homes worth more than £2 million from April 2028. If you’re planning to sell, transfer or gift a property, it may be worth reviewing your legal arrangements before the changes come into play.
Do I need to update my Will or estate plan after the 2025 Budget?
You may not need to make immediate changes, but the combination of frozen IHT thresholds, new rules for business and agricultural relief, and pensions coming into the IHT net in 2027 means a review is sensible. A short conversation with a solicitor can help you check that your current Will, trusts or gifts still work as intended.
Has the seven-year gifting rule changed?
No. Although there was some speculation that the seven-year rule for inheritance tax might be extended to ten years, this did not happen. The standard rule still applies: gifts made more than seven years before death are usually exempt from IHT, with taper relief applying between years three and seven.
Does the removal of the two-child limit affect child maintenance or separation agreements?
It can do in some cases. The change increases benefit support for larger families, and this may alter how day-to-day finances look during or after a separation. If you’re unsure how this might affect a financial settlement or child maintenance calculation, legal advice can help you understand your position.
How does the pension salary sacrifice cap affect me?
From April 2029, employees can only save National Insurance on the first £2,000 of pension contributions made through salary sacrifice each year. Higher earners who rely heavily on salary sacrifice may want to revisit their arrangements, particularly if pensions form a key part of estate planning or divorce settlements.
This article is for general information only and does not constitute legal advice. For guidance tailored to your specific circumstances, please speak to a qualified solicitor.