UK Autumn Budget: What Expats Can Expect
Discover key insights on the 2025 UK Autumn Budget and its impact on expat financial planning. Stay informed and optimise your strategy - read more now!
On November 26th this year, Chancellor Rachel Reeves, will deliver the Autumn budget for 2025. If you are a UK expat living abroad, you may be wondering how this new budget and the potential changes and reforms it may bring may affect you and your finances, especially if you still have ties to the UK.
This Budget will inevitably come with revenue-raising measures, with a reported Government spending gap of between £20bn - £40bn to eliminate, and tax rises have not been ruled out.
A tough fiscal outlook and looming tax hikes can be worrying, especially for expats who may be managing their finances across borders. Our guide will walk you through the key forecasted changes, what these could mean for you, and practical steps on how to manage them.
Expected Reforms and Tax Increases
The Government has signalled that major headline tax rates (income tax, national insurance, VAT) may be spared large uplifts in this Budget, but many observers expect the focus to be on wealth, assets and “stealth” tax rises (indirect tax rises to lesser known taxes, which may still impact your cost of living or monthly take home pay).
Introduction of an Exit Tax
The Chancellor has been said to be considering the introducing an ‘exit tax’ or ‘exit charge’ for wealthy citizens leaving the UK. This is a major concern for anyone planning on moving abroad in the near future, and potentially for UK expats who are no longer resident but still hold UK assets.
Capital Gains Tax (CGT)
One of the more visible themes is potential higher CGT or reductions in reliefs, especially for business assets. For example, the Business Asset Disposal Relief (BADR) and Investors’ Relief (IR) have already been trimmed: a recent insight notes that BADR/IR’s lifetime limit was cut (IR’s was reduced from £10m to £1m), and rates increased to 14% from 6 April 2025, then to 18% from April 2026.
The speculation also includes abolishing or reducing the base-cost uplift on death and possibly reducing the annual exempt amount further.
Inheritance Tax (IHT) and Succession Planning
When it comes to inheritance tax, there have already been a few changes made in recent times which expats should be aware of. For example, from 6 April 2026 agricultural relief and business property relief are being restricted to a combined £1 million at the 100% rate.
Furthermore, there is speculation that lifetime gifting rules may be tightened or capped. Currently, there are rules in place which exempt certain gifts from IHT if the donor survives for at least seven years, but this may also be subject to change.
Pension and ISA Tax Reliefs
One area of the Budget that has received a lot of speculation is the UK Government’s treatment of pensions. Possibilities include reducing the £268,275 tax-free cash lump sum, restricting salary-sacrifice pension contributions, or capping tax relief on contributions. ISAs are also under scrutiny, with talk of potentially lowering allowances.
Threshold Freezes and ‘Stealth’ Taxes
Despite attempts to assure the public that we will not be seeing direct rises in income tax rates, key concern is that the chancellor will extend the freeze on tax thresholds ( such as personal allowance, higher-rate income tax threshold, National Insurance bands), allowing inflation or nominal earnings to push more people into higher tax brackets, without direct changes to headline rates.
What Will These Changes Mean for UK Expats Living Abroad?
Even if you live overseas as a UK expat, you may still be affected by any of the rumoured changes the Autumn budget 2025 may bring. Here are some areas to keep an eye on:
Capital Gains and UK Based Assets
If you hold any UK based assets, such as property, company shares, or business interests, you could face higher CGT or reduced reliefs. The potential removal of the base-cost uplift on death or the introduction of an exit tax (treating you as disposing of assets when you leave the UK) is a very real risk.
This means that individuals wanting to leave the UK for tax reasons, may still face tax consequences when moving. For expats already living abroad, it would be wise to review any UK-connected assets, and check how your domicile/residence status may expose you to tax reforms.
Inheritance tax and cross-border estates
If you are still UK domiciled, or if you hold any UK assets as part of your estate, the potential upcoming changes to IHT tax reliefs and gifting rules should be a concern. As an expat, it would be wise to look at your UK assets, such as property, shareholdings, pensions and trusts, and be aware of how these potential changes may interact with your foreign residency status, as well as the tax regime of your new country of residence.
Your adviser can help you plan around these changes, such as the rules around lifetime gifting, and acting sooner rather than later may save you and your heirs from any tax traps.
Pension Planning
Although officials have now ruled out cuts to the UK pension tax-free lump sum limit in this Autumn budget, other changes such as caps on the tax advantages and reliefs may still be announced.
If you still hold any UK pensions, you may already be facing limitations on access and management from abroad, as well as currency risk every time you convert from GBP to your local currency. Now may be a good time to consider a pension transfer to a solution more suited to expats, such as an international SIPP.
Mitigating the Exit Tax Risk
For individuals considering leaving the UK, the risk of a UK exit tax is particularly relevant. If the UK enacts a deemed disposal rule when you depart, you may become liable for UK CGT on unrealised gains accrued while you were a UK resident. For those already living abroad, understanding when your UK tax residency ended (and whether you still have UK domicile ties) is essential. Pre-departure planning (or reviewing your UK tax footprint now) may avoid any unwelcome surprises.
Tax threshold freezes and foreign income
If you receive UK-sourced income (for example rental income from a UK property) or you remain a UK resident for tax purposes, the freezing of allowances could lead to your UK tax burden gradually rising, even without rate hikes. In addition, if you live abroad but still elect UK tax status for certain incomes, be aware that the UK side of your tax affairs may become less favourable over time.
Autumn Budget: Practical Steps For UK Expats
Without a doubt, this Autumn Budget will bring worrying changes for many UK residents and expats alike. Here are some practical steps you can take, to protect your wealth from potential risks:
Step One:
Review your UK-connected exposures- do you hold UK property, shares in UK-resident companies, UK pensions, or do you receive UK rental income?
Step Two:
Ensure you are clear on your UK tax residency and domicile status: simply moving abroad does not automatically remove your UK tax obligations, and you won't want to be caught out by any exit or deemed-disposal rules which may be introduced.
Step Three:
Carefully consider the timing of any disposals, gifts or structural changes: if reliefs for capital gains tax or inheritance tax are being reduced, crystallising gains or making lifetime transfers while the current rules still apply may pay off.
Step Four:
Revisit your pension and retirement planning: consider how re-structuring your pension may benefit you as a non-UK resident.
Step Five:
Keep an eye on your personal allowances and thresholds: with freezing of thresholds you may gradually be pushed into higher tax burdens in the UK side of your affairs, especially if you retain UK-source income.
Step Six:
Stay informed, and remember that all of the aforementioned changes are still speculative. The 26 November 2025 will reveal definitive measures, and acting prematurely based on rumours may lead to unintended outcomes. However, seeking tailored advice and reviewing your financial position, especially when it comes to cross-border tax issues is always wise.
At The Wealth Genesis, we specialise in creating tailored financial plans for expats around the world. If you are planning to move abroad, or you want to protect your wealth for a secure financial future, we are here to help. Book a free discovery call to learn more.
