Autumn Budget 2026: The Expat and Non-Resident Reading

The Budget was delivered on Wednesday 28 October by Chancellor John Healey, under the title Breathing Space for Today, Fresh Hope for the Future. Five weeks ago I wrote a piece sorting the pre-Budget rumours into what was already law, what was genuinely being briefed, and what was noise, and I closed it by promising an assessment of what the Budget actually does for internationally mobile clients once the detail was available rather than before. This is that assessment, and it begins with the part most commentary omits: the scorecard on my own predictions.

A general summary of this Budget was available from every accountancy firm in the country within hours of the Chancellor sitting down. What is harder to find is a reading for people who are not UK resident, who are in the process of leaving, who intend to return, or who hold UK assets from abroad. That is what follows. I have tried throughout to say not only what each measure does but who it reaches — because the most common failure in expatriate Budget coverage is to describe a measure that applies to UK residents without ever mentioning that a non-resident is untouched by it.

What the Budget actually did

In one sentence: it left the taxation of earnings alone and took more from income produced by assets, while leaving the residence and domicile rules entirely undisturbed.

The central personal measure is a rise in the rates of tax on savings income and property income. The Chancellor's words were that he was "increasing the rates of tax on income from property and savings by a further two percentage points from April 2027", with "no change to tax on income from dividends and no change to tax on income from employment". The word further is doing real work there. The Budget of 2025 had already legislated a two-point rise on these two income types from April 2027; this Budget adds two more points to the same starting date. The net effect is that from 6 April 2027 savings and property income are taxed at 24%, 44% and 49% — four points above the ordinary rates of 20%, 40% and 45%, which are themselves unchanged.

The Treasury's framing is that 84% of income tax payers will be unaffected, and that around half the revenue comes from the top 10% of households. The Chancellor added that 88% of people will pay no more tax on their savings. Those numbers describe the UK resident population. They say nothing about how the measure lands on someone living in Dubai with a flat in Manchester, which is the question this article exists to answer.

Which of my pre-Budget calls held, and which did not

Two of the three substantive predictions I reported in September did not come to pass, and I would rather say so plainly than quietly move on.

Capital gains tax was the clear miss. I described it in September as "the most cited candidate" and noted that moving capital gains rates closer to income tax rates was "the change most advisers expect in some form". It did not happen. The main rates remain 18% and 24% for 2027-28 and the annual exempt amount stays at £3,000. The Chancellor resisted the calls to raise them. Anyone who crystallised a large gain in October to pre-empt a rise has paid tax years early for nothing, which is precisely the failure mode I warned against — and the warning does not make the prediction any less wrong.

Dividends were the second miss. I wrote that a further rise "would not breach the manifesto pledge, which is precisely why it keeps appearing in predictions". It kept appearing, and it did not arrive: the speech was explicit that there is no change to dividend taxation, and the ordinary, upper and additional dividend rates stay at 10.75%, 35.75% and 39.35% with a £500 allowance.

The framework held, even though the picks did not. I argued that the manifesto commitment on the headline rates of income tax, National Insurance and VAT meant revenue would be found from assets rather than earnings, and that this was the way to read the rumours. That is exactly what happened — the Chancellor explicitly protected employment income and went to savings and property instead. I named the right category and then pointed at the wrong two members of it.

On threshold freezes I was half right. I expected revenue from fiscal drag. Fiscal drag duly continues, but not because of anything in this Budget: the personal allowance of £12,570 and the higher rate threshold of £50,270 were already set to be maintained until April 2031 by the previous Budget, and the Chancellor did not mention income tax thresholds at all. The money came from an explicit rate rise on a narrow base rather than a quiet extension of a freeze.

What held cleanly: pensions coming inside the estate for inheritance tax from 6 April 2027, which I put in the "already law" category and which was confirmed; the residence-based inheritance tax rules, untouched; and the judgement that a wealth tax was improbable in this Budget, which proved correct. The one I would mark as partially right is property. I reported talk that the £2 million threshold could be lowered and charges increased, against a stated exclusion of any wholesale annual property tax. Both turned out to be true at once, in a way I did not anticipate — see below.

If you are not UK resident, does the savings rise reach you?

For a great many non-residents, it does not — and this is the most important thing in this article.

UK bank and building society interest, UK dividends, unit trust income, National Savings income and the State Pension are what the legislation calls disregarded income. Under the standing rules for non-residents, your total UK tax liability is capped at the sum of (a) the tax on your UK income other than disregarded income, computed before personal allowances, and (b) any tax deducted at source from the disregarded income. UK interest has for years been paid gross, with no tax taken off at source. Run the cap and the tax on that interest is frequently nil — and it stays nil whether the headline savings rate is 20% or 49%.

So the Budget's most-discussed personal tax rise may be, for a non-resident with UK savings and little else, entirely academic. I would not want a single client to restructure a deposit on the strength of a headline that does not apply to them.

Three cautions, because this relief is neither automatic nor free. First, the cap is a trade: claim it and UK personal allowances are not given against your other income, so both computations have to be run and the better one taken — HMRC's own guidance notes that some non-residents are better off being taxed as though resident. Second, it does not apply in the overseas part of a split year, nor where the investment income is connected to a UK trade carried on through a permanent establishment. Third, it is a UK domestic rule and says nothing about the tax your country of residence charges on the same interest; that is a matter for local advice and the relevant double tax treaty, neither of which this Budget altered. Our tax residency explainer and the statutory residence test tool deal with the residence question itself, which is logically prior to all of this.

If you let UK property from abroad, what changes?

Here the answer is the opposite, and it is the measure expatriate landlords should actually attend to.

The disregarded income rules do not extend to UK property income. A landlord living in Singapore and a landlord living in Surrey are, on this point, in the same position: UK rental profits are taxable in the UK, and from 6 April 2027 they are taxable at 24%, 44% and 49%. There is no non-resident shelter here. For an expatriate whose UK rental profit sits in the higher band, the rate moves from 40% to 44% — a tenth more tax on the same rent, legislated in a Finance Bill that has not yet passed.

Three details matter more than the headline:

• Finance cost relief moves with the basic rate. The basic rate credit landlords receive for mortgage interest tracks the property basic rate, so it rises from 20% to 24% from April 2027. For a geared landlord this partly offsets the rate rise, and the net effect depends entirely on the loan-to-value. It is arithmetic, not a judgement call, and it is worth doing on your own numbers before forming a view.
• The Non-Resident Landlord Scheme withholding rate follows too, to 24%. This changes when you part with the money rather than how much you ultimately owe, and it has no effect where HMRC has approved you to receive rents gross. If you are a non-resident landlord without gross payment status, the approval is worth having for cash-flow reasons alone, and this makes it more so.
• Scotland is not covered. The property rate change applies to England, Wales and Northern Ireland, with the Scottish and Welsh governments retaining their own powers over property income rates. The savings rate change, by contrast, applies across the whole UK. If your let property is in Scotland, do not assume the 24% figure is yours.

What the Budget did not do

This is a short list, and for internationally mobile clients it is more consequential than most of what it did do.

I searched the Budget document itself for the vocabulary of international tax. It contains no mention of domicile, of the foreign income and gains regime, of the remittance basis, of the long-term residence test, or of the Statutory Residence Test. No amendments to the FIG regime were announced. The residence-based inheritance tax rules that replaced domicile on 6 April 2025 are untouched, which means the ten-of-twenty-years test still determines whether your worldwide estate is in scope. No exit tax was introduced. No wealth tax was introduced. No new investor visa featured.

I want to be careful about how much comfort to take from that. An absence of change in one Budget is not a commitment, and work continues in adjacent areas — there is a consultation on offshore penalties still to come, a review of controlled foreign company rules and of withholding treaty relief, and continuing exploration of reform to the Double Taxation Treaty Passport. The honest summary is that the architecture governing where you are taxed survived this Budget intact, and that this is the position today rather than a promise about 2027. For those weighing their position, the framing I set out in repositioning, not escape is unchanged by anything the Chancellor said.

Pensions: what moved for someone drawing a UK pension abroad

The pensions changes are mostly a continuation of a direction already set, with one immediate item.

Most unused pension funds and death benefits come inside the estate for inheritance tax from 6 April 2027. This was legislated before this Budget and was confirmed by it, with the addition that personal representatives can direct a scheme administrator to pay the tax due. If you hold a UK pension and live abroad, the question of whether your estate is within the UK inheritance tax net at all is governed by the long-term residence test, not by the location of the pension — so the two issues have to be looked at together rather than separately.

Two further changes are worth noting. The two-year rule for pension and lump sum death benefits was removed for payments made on or after 28 October 2026 — one of the few measures already in force. And excess lump sum death benefits are now assessed on beneficiaries at their own marginal rates, retrospectively for payments from 6 April 2024, with the inheritance tax interaction applying to deaths from 6 April 2027. For a beneficiary who is not UK resident, their marginal rate is a question about their own UK tax position, which is exactly the sort of detail that nomination forms written a decade ago never anticipated. Our UK pensions hub sets out the mechanics, and the pension gap calculator is a reasonable starting point for the funding side.

UK property held from overseas: the £2 million surcharge and ATED

A new annual High Value Council Tax Surcharge applies to residential property in England worth £2 million or more, from April 2028, collected by local authorities alongside council tax. The government has confirmed a deferral scheme, a series of discounts and exemptions, and a 100% premium on properties left empty and unoccupied for twelve months or more. The Valuation Office will run a targeted exercise to identify properties in scope.

Two things follow for an overseas owner. The charge attaches to the property, not to the owner's residence status, so being non-resident is not a defence. And the empty-property premium is a live risk for exactly the sort of London flat that an expatriate family keeps for occasional use. The published material confirms the existence of discounts and exemptions without yet setting out their detail, and the measure comes through the Finance Bill, so the fine print may still move.

Separately, Annual Tax on Enveloped Dwellings charges rise by 3.5%, in line with September 2026 CPI, for the 2027-28 charging period. That is routine uprating under existing legislation rather than a new policy, but it is the charge that falls on UK residential property held through a company, which is a common pattern among international owners.

Finally, the Budget puts the taxation of foreign sovereign investors on a statutory footing for the first time, bringing certain UK real estate income and gains into charge from January 2029 with bespoke access to Real Estate Investment Trusts. This reaches states, state-owned entities and sovereign wealth funds — not private individuals — but it is a clear signal about the direction of travel on UK real estate held from outside the country.

What bites now, what bites later, and what is still only a proposal

The discipline I urged in September applies with more force now that there is text to read. Distinguish announced from legislated from in force.

In force already (28 October 2026): removal of the pensions two-year rule; the inheritance tax rule on trust liabilities; the capital gains exit-charge easement for a trust that is only temporarily UK resident, which is a genuinely useful change for internationally mobile trustees; and technical changes to the attribution of gains made by non-resident close companies.

Announced for 6 April 2027, and in a Finance Bill that has not yet passed: the 24%, 44% and 49% rates on savings and property income; the Business Asset Disposal Relief lifetime limit falling from £1 million to £500,000; most unused pension funds entering the estate; and the trading allowance rising from £1,000 to £3,000.

Later, or still conditional: the High Value Council Tax Surcharge in April 2028; the elective relief for UK residents facing double taxation on US LLCs and similar reverse hybrids, with claims from early 2028; the sovereign investor regime in January 2029. Founders' Relief — a proposed 10% rate on qualifying gains up to £10 million — remains subject to a consultation and is not law. Treat it as a proposal.

What I would and would not do now

I would check, first, whether any of this reaches you at all. A surprising number of non-residents will read the savings headline and conclude they have a problem they do not have. Establishing which category you fall into costs nothing and settles the question.

I would run the property arithmetic properly if you let UK property from abroad — the rate rise and the improved finance cost credit pull in opposite directions, and the answer is specific to your gearing. The take-home pay calculator and the income and expenditure calculator are useful for framing the cash position, though neither is a substitute for a computation on your actual figures.

I would revisit pension nominations, as I suggested in September, now that the April 2027 date is confirmed and the treatment of excess lump sums has changed.

I would not restructure anything on the strength of the Founders' Relief proposal, which is a consultation document rather than a rule. And I would not take the absence of change to the residence rules as a reason to defer a review of your residence position: the ten-year test is unchanged, which means the clock that was running in September is still running now. Checking where you stand on it remains, as it was before the Budget, the single most useful thing most internationally mobile readers can do. The UK domicile test and our wealth expatriation hub are the right starting points, and the UK expats hub collects the rest.

What I have left out, and why

Three things, in the interest of being straight about the limits of this piece.

I have not written about the household energy measures in any detail — the £100 payment for households in English council tax bands A to D, and the extension of the zero rate of VAT on domestic electricity to 30 June 2027. They are real, but they attach to UK households and are largely irrelevant to a reader living abroad.

I saw pre-Budget reports of a specific increase in business rates relief for pubs and live music venues, and of the removal of standing charges from household gas bills. I could not confirm the first in the form reported against the Budget documents, and I have not verified the second to my own satisfaction. I have therefore left both out rather than repeat them. If they matter to you, read the Budget document directly.

I was not able to reach the Office for Budget Responsibility's own site while preparing this, so the forecast figures below are taken from the Budget document's reproduction of the OBR forecast rather than from the Economic and Fiscal Outlook itself. For completeness: growth of 1.2% in 2026 and 1.0% in 2027 before recovering to 1.6% and 1.8%, inflation peaking at 3.8% in the first quarter of 2027, and headroom against the stability rule of £15 billion in 2029-30. The relevance to an internationally mobile reader is indirect but real — thin headroom is what makes a Chancellor return to the same well, and the wells he has not yet drawn from include several that would reach you.

How Global Investments can help

Global Investments is an independent international wealth advisory firm with three decades of experience advising internationally mobile families. We are not authorised or regulated by the UK Financial Conduct Authority and cannot provide regulated advice to UK residents in the UK. What we do is help globally mobile clients see their position whole — residence, structuring, pensions and succession together rather than one at a time — working alongside your existing tax and legal advisers rather than replacing them. If you would like your own position reviewed in light of what this Budget did and did not do, that conversation is worth having before April 2027 rather than after it.

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This article describes the position as at 4 November 2026, following the Budget of 28 October 2026. It distinguishes measures already in force from those announced but not yet legislated; the Finance Bill 2026-27 had not completed its passage at the time of writing and announced measures may change before they become law. Tax treatment depends on individual circumstances and on the law of your country of residence as well as the UK's, and may change. This is information, not a personal recommendation.

Sources: HM Treasury, Budget 2026 — Breathing Space for Today, Fresh Hope for the Future (HC 726, 28 October 2026), including paragraphs 2.50 to 2.53 on savings, property, ISAs and Business Asset Disposal Relief, paragraph 2.40 on foreign sovereign investment, paragraphs 6.234 to 6.235 on the High Value Council Tax Surcharge and ATED, and Table 1.1 for the OBR economic forecast. HM Treasury, Budget 2026 speech, 28 October 2026. HMRC, Budget 2026 Overview of Tax Legislation and Rates and its Annex A rates and allowances for 2027-28. HMRC tax information and impact note, Income Tax: changes to tax rates for property and savings income. HMRC helpsheet HS300, Non-residents and investment income, for the disregarded income rules. HMRC policy paper, High Value Council Tax Surcharge on residential properties. Deloitte Taxscape on the income tax and National Insurance threshold freeze to April 2031. Professional commentary from Macfarlanes, Saffery and BCLP consulted for the treatment of internationally mobile individuals, the Non-Resident Landlord Scheme withholding rate and the real estate measures, with primary documents preferred for every figure cited.