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The Chancellor’s Autumn Budget: How It Affects You and How We Can Help
The Chancellor, Rachel Reeves, has delivered the Autumn Budget 2025 setting out fiscal measures. These changes will affect individuals, families, and businesses across the UK, so planning ahead is essential. Understanding these changes is crucial, so we have highlighted the key changes and what they mean for you below.
Key Changes and Their Implications
Income Tax Reforms:
National Insurance (NI) and income tax thresholds will remain frozen for an extra three years beyond 2028, meaning more people will move into higher tax bands over time as their income increases.
Basic and higher income tax rates on property, savings, and dividend income will increase by 2 percentage points.
Scottish Finance Secretary Shona Robison is expected to publish her plans on 13 January 2026. We will provide an additional update after the Scottish Budget announcement to explain any regional differences.
Pensions:
From April 2029, National Insurance will be charged on salary-sacrificed pension contributions above an annual £2,000 threshold. Contributions above this will be treated as ordinary pension contributions and subject to both employer and employee National Insurance Contributions.
From April 2026, the state pension will rise by 4.8%, in line with average wages:
New flat-rate state pension (for those who reached pension age post-April 2016): £241.30 per week (£12,547.60 per year), an increase of £574.60.
Old basic state pension (for those who reached pension age pre-April 2026): £184.90 per week (£9,614.80 per year), an increase of £493.40.
You generally need 35 years of qualifying contributions to receive the full state pension. If you are unsure about your qualifying years or how these changes impact your retirement planning, our Financial Services team can help.
Inheritance Tax (IHT) Reforms:
The Chancellor has announced that the £1 million allowance for family farms and businesses will now be transferable between spouses, providing greater flexibility for some agricultural and business families.
Whilst this could reduce tax burdens for some farming and business families with jointly owned assets, there could still be large inheritance tax bills for those who own valuable farms and/or business assets, so it remains important to take early tax planning advice – contact our Inheritance Tax Planning team for tailored advice.
Property Tax Overhaul:
Stamp Duty Land Tax (SDLT) in England and Northern Ireland will be replaced by seller-based property tax on homes sold for over £500,000, and a £2,500 annual mansion tax will apply to properties valued over £2 million, and £7,500 for properties over £5 million. While SDLT does not apply to Scotland, these changes may influence UK property markets and cross-border transactions.
ISAs (Individual Savings Accounts):
The Chancellor has also announced changes to ISA allowances starting in April 2026. For under 65s, £12,000 can be put into cash ISAs, with the remainder of the £20,000 allowance reserved for investments. There is no change for those aged 65 and over.
The government hopes that the change will encourage more people to invest in stocks and shares ISAs.
To learn more about how our Financial Services team can help optimise your ISA strategy, click here.
Capital Gains Tax (CGT) and Business Asset Disposal Relief (BADR):
The Autumn Budget has introduced notable changes to CGT and BADR that will impact business owners and entrepreneurs planning exits. The CGT rate under BADR will rise from 14% to 18% from April 2026, significantly increasing tax liabilities on business sales.
Additionally, the Chancellor announced changes to CGT for business owners transferring shares into Employee Ownership Trusts. Previously, qualifying disposals were entitled to 100% relief; this has now been reduced to 50%, effective immediately. Half of the gain will be exempt, and the other half will be taxed at the seller’s applicable CGT rate.
These changes make timing and structuring of disposals critical, as well as exploring alternative succession strategies to mitigate exposure. Our Corporate team is here to support and advise on your business needs.
At Raeburn Christie Clark & Wallace, we understand that these changes can feel overwhelming, whether you’re planning for your family’s future, managing your business, or making key financial decisions. Our dedicated teams are here to provide clear, practical advice tailored to your circumstances.
Contact us today to discuss how these updates might affect you and explore the options available.
