Sorry, no search results could be found.
27 Nov 2025 | 4 minutes to read
Head of Financial Planning, Daniel Swift, takes stock of the updates from the Spring Statement and highlights the ongoing considerations for financial planning.
On Wednesday, we saw Rachel Reeves deliver her second statement as Chancellor of the Exchequer amid a torrent of rumours, fuelled in part by the accidental leaking of the Budget document a few hours before Reeves addressed the House of Commons. Despite the distractions and a rebuke from the Deputy Speaker over the further leaks by the Government in the build up to the Budget, Chancellor Reeves reinforced her clear message of fiscal discipline, revenue raising and long-term growth.
The Government remained firm in its commitment not to increase headline tax rates yet introduced a series of significant tax changes that will affect employees, businesses, savers, investors and property owners over the coming years.
The freeze on income tax thresholds will now extend for three more years to 2030/31, meaning they remain at:
In addition, from April 2027, income tax rates on property and savings will rise by 2%, taking them to 22% (basic), 42% (higher) and 47% (additional).
Importantly, income tax reliefs will apply to other incomes first, so these higher rates are likely to bite for those with property or significant savings income. This reinforces the need to revisit your financial plan and consider your tax position.
From April 2027, the annual Cash ISA allowance will reduce to £12,000 for those under 65, while those aged 65 and over will retain the current £20,000 limit. This change significantly narrows the tax-free cash savings opportunity for many savers and may prompt consideration of increasing the risk with their ISA monies going forward. For those under 65, reviewing existing savings strategies will be important to ensure allowances are fully utilised and invested in line with the appropriate risk level.
High-value property owners are facing a new tax, coined by Reeves as the Mansion Tax. Starting in 2028/29, property owners with homes valued above £2 million will face an annual tax surcharge of £2,500. For those with properties worth more than £5 million, the surcharge rises to £7,500 each year.
Investors relying on dividend income will have their yields clipped by a 2% tax rise from April 2026. That lands the basic rate at 10.75% and the higher rate at 35.75% – the additional rate will remain unchanged at 39.35%.
From April 2029, salary sacrifice pension contributions over £2,000 will no longer be exempt from National Insurance Contributions (NIC). This change reduces the efficiency of larger salary sacrifice arrangements, adding complexity and additional costs to employees who are planning for their pensions.
From April 2028, a new mileage-based tax of 3p per mile will apply to electric vehicles and 1.5p per mile for hybrid vehicles. This marks a shift towards taxing EV usage as adoption grows and Fuel Duty returns diminish for the Government, prompting many to review their cost of ownership calculations.
Although not mentioned in Reeves’s address, the Inheritance Tax (IHT) nil-rate band freeze will continue until April 2031, increasing the likelihood that more estates will exceed the threshold over time. Despite this, estate planners can expect some flexibility, as from April 2026, agricultural and business property reliefs will become transferrable between spouses. These two changes highlight the importance of proactive estate planning to mitigate future liabilities.
Upfront tax relief on Venture Capital Trusts (VCT) will reduce from 30% to 20% from April 2026, rebalancing the incentive to invest when compared to Enterprise Investment Schemes (EIS), which remains at 30%. At the same time, the government is increasing the VCT and EIS investment threshold limits and gross assets test to allow investors to follow-on as companies grow beyond the start-up phase.
The current 100% Capital Gains Tax relief on businesses sold to employee ownership trusts will be cut to 50%, a significant shift for succession planning. Business owners considering this route should review timing and structure to optimise outcomes under the new rules.
Beyond what is being taxed, when the tax comes into effect underpins much of Reeves’s Autumn Budget. The measures announced will not take effect all at once. Instead, they are spread across multiple dates from 2026 through to 2031, creating a complex timeline of changes that will impact savings, investments, property ownership and estate planning.
Not to be forgotten in the melee of Reeves’s fresh taxes, two of the Chancellor’s most significant announcements from her 2024 Budget are yet to come into effect. IHT to farms and businesses and the addition of pensions into taxable estates come into effect from April 2026 and April 2027 respectively.
This staggered and complex implementation means that while there is time to prepare, early action is essential. Reviewing your financial plan now can help ensure you make the most of current allowances and adapt strategies to mitigate the impact of higher taxes and new charges as they come into force.
Please note that any tax benefits will depend on your personal tax position and rules are subject to change. The value of investments can go down as well as up, and you may get back less than you invested.
Before you invest, make sure you feel comfortable with the level of risk you take. Investments aim to grow your money, but they might lose it too.