Autumn Budget - impacts on financial planning

The Chancellor has set out the Government's latest Budget, unveiling a series of tax and spending measures with implications for householders, savers and businesses. Below, we set out the key points that impact financial planning for private clients:

• Tax on properties worth more than £2m, based on 2026 prices, from April 2028. Valuations will be conducted by the Valuation Office. The surcharge will be between £2,500 and £7,500 per annum, applied over four bands.

• Cash ISA deposits restricted to £12,000 per tax year, from April 2027, for individuals under the age of 65 and thus remain at £20,000 for those over 65 (investment ISA allowance remains at £20,000). Lifetime ISAs are likely to be replaced.

• VCT income tax relief to reduce from 30% to 20% from 2026.

• An increase of 2% on income tax on savings, and income tax on property rental income, from 2027.

• An increase of 2% on basic and higher rate dividend tax from April 2026. The additional rate will remain unchanged at 39.35%.

• New mileage-based tax from April 2028 for electric and plug in hybrid cars. This will be a levy of 3p for electric cars and 1.5p for plug in hybrid cars.

• Removal of NI savings on pension contributions in excess of £2,000 made by salary sacrifice – from 2029. This means that salary-sacrificed pension contributions above £2,000 will be treated as ordinary employee pension contributions in the tax system and therefore be subject to both employer and employee NICs.

• A 50% reduction to capital gains tax relief on employee ownership trusts, we believe applicable immediately.

• Income tax threshold freeze until 2030/31.

• Removal of the two-child benefit cap.

• State pensions to increase 4.8% in April.

• Regarding the changes to inheritance tax due in April 2026 on business and agricultural assets, the £1m allowance will now be transferrable between spouses on first passing so total £2m per married couple.

• Pensions are still due to be liable to inheritance tax from April 2027, an extension of up to 15 months is due to be available.