On the 26th of November, the Chancellor of the Exchequer, Rachel Reeves, unveiled the 2025 Autumn Budget, setting out a programme focused on stability, investment, and long-term economic growth. Below is a summary of the key announcements.

Rachel Reeves’ Budget centred on rebuilding the UK economy while adhering to “iron-clad fiscal rules”, with an emphasis on broad participation in supporting that ambition. Although the tax measures announced were significant, they were more measured than many had anticipated.

The Chancellor confirmed that corporation tax will remain at its current rate and introduced several pro-growth initiatives, including a new SDRT relief for newly listed shares, an expansion of the enterprise management incentives scheme to include scale-ups, increased investment limits for venture capital trusts and enterprise investment schemes, confirmation that a VAT group can include a “whole entity” based overseas, and a new allowance giving businesses 40 per cent tax relief on qualifying capital spending in the first year. The writing down allowance will, however, reduce from 18 per cent to 14 per cent.

For individuals, the Budget introduced a new structure under which investment income, including property income, dividends and savings, will be subject to an additional two per cent, while income tax and national insurance thresholds will remain frozen until 2031. Other measures included a reduction of the CGT relief on qualifying disposals to an employee ownership trust from 100 per cent to 50 per cent, a cap on salary sacrifice pension contributions, and new anti-avoidance provisions relating to CGT on share exchanges, company reorganisations and disposals by non-residents.

On inheritance tax, the government built on last year’s reforms, maintaining the nil-rate band and residence nil-rate band thresholds and introducing the ability to transfer the unused £1 million “100 per cent relief” allowance across agricultural and business property to a spouse or civil partner. In relation to savings, individuals under 65 will now be able to place up to £12,000 of the overall £20,000 ISA allowance into a cash ISA.

Please find below further details on specific measures that may be relevant.

Measures with effect from 26 November 2025 or before

Capital Gains Tax — Employee Ownership Trusts

This measure restricts the amount of relief from Capital Gains Tax (CGT) available on qualifying disposals of shares made to the trustees of an Employee Ownership Trust on or after 26 November 2025.

From 26 November 2025, 50% of the gain on disposal to the trustees of an Employee Ownership Trust will be treated as the disposer’s chargeable gain for CGT purposes. The remaining 50% of the gain will not be chargeable at the time of disposal but will continue to be held over to come into charge on any future disposal of the shares by the trustees of the Employee Ownership Trust.

Measures with effect from 27 November 2025

The measure introduces an exemption from the 0.5 per cent Stamp Duty Reserve Tax on agreements to transfer securities of companies whose shares are newly listed on a UK regulated market. The exemption will apply for three years from the date of listing and will cover all of the company’s securities during that period, not only its shares. It will also extend to depositary interests over those securities where the depositary interests relate to newly listed shares.

The exemption will not apply to the 1.5 per cent SDRT charge for transfers into depositary receipt systems or unelected clearance services, nor to transfers forming part of a merger or takeover involving a change of control.

Future Measures

  • From April 2029 both employer and employee NICs will be levied on salary sacrificed for employer pension contributions to the extent the amount sacrificed exceeds £2,000. Employees will continue to be able to make effective salary sacrifices above £2,000.
  • Income tax thresholds and the main National Insurance thresholds will remain frozen for an additional three years, from 2028 to 2031.

This includes the personal allowance, the higher and additional rate thresholds, and the key NIC thresholds for employees, the self-employed and employers.

From 2026–27, the lower earnings limit, small profits threshold and the Class 2 and Class 3 NIC rates will increase in line with the September 2025 CPI figure of 3.8 per cent.

  • The government will tighten the CGT share reorganisation rules by widening the existing anti-avoidance tests. In future, the rules on share exchanges, reconstructions, business transfers and certain collective investment schemes will not apply where the main purpose, or one of the main purposes, of the arrangements is to reduce or avoid CGT or corporation tax. These changes will be introduced in the Finance Bill 2026.
  • The post-departure trade profits provisions will be removed from the temporary non-residence anti-avoidance legislation, so that all dividends received from a UK close company during a period of temporary non-residence will be chargeable to income tax. Currently, cash dividends paid out of profits arising during the period in which the individual is temporarily non-resident are excluded from charge.

The legislation will also include new sections to prevent individuals from bypassing the temporary non-residence rules, as well as measures to relieve any double taxation on the income that is not relievable under double taxation agreements or unilateral relief. This measure will be implemented by the Finance Bill 2026 and take effect from 6 April 2026.

  • The rates of tax on property, savings and dividend income will be increased by 2%, and the notional tax credit on UK dividends received by non-UK residents will be abolished.

Currently, property and savings income is taxed at the basic rate (20%), higher rate (40%) or additional rate (45%), and dividends are taxed at the dividend basic rate (8.75%), dividend higher rate (33.75%) or the dividend additional rate (39.35%).

The Finance Bill 2026 will include legislation to:

  • Introduce separate tax rates for property income from April 2027. These will be set at 22% for the property basic rate, 42% for the property higher rate and 47% for the property additional rate.
  • Increase the rates of income tax on savings income from April 2027 by 2% to 22% for the savings basic rate, 42% for the savings higher rate and 47% for the savings additional rate.
  • Increase the rates of income tax on dividend income from April 2026 by 2% to 10.75% for the dividend basic rate and 35.75% for the dividend higher rate. The dividend additional rate will remain unchanged.
  • EIS - Venture Capital Trusts. Legislation will be introduced in Finance Bill 2026 to:
  • Increase the EIS and VCT gross assets tests to £30 million (from £15 million) immediately before the issue of the shares or securities, and £35 million (from £16 million) immediately after the issue.
  • Increase the EIS and VCT annual investment limits to £10 million (from £5 million) and for knowledge-intensive companies to £20 million (from £10 million)
  • Increase the EIS and VCT lifetime investment limits to £24 million (from £12 million) and for knowledge-intensive companies to £40 million (from £20 million)
  • Reduce the rate of income tax relief that can be claimed by an individual investing in VCT to 20% (from 30%).

The changes will take effect from 6 April 2026.

  • From 1 January 2026, the government will introduce a new 40 per cent first-year allowance for qualifying expenditure on plant and machinery in the main capital allowances pool. From April 2026, the writing down allowance for the main pool will fall from 18 per cent to 14 per cent, with hybrid rates applying to accounting periods that straddle the change. The new allowance will be available for new assets, including most leased plant and machinery, but will exclude cars and second-hand assets. These measures will be legislated for in the Finance Bill 2026.

Should you wish to discuss any of these measures further, please do not hesitate to contact a member of our team.