Guide to the UK Budget 2025 for Global Investors
- Neil Robbirt
- 1 day ago
- 8 min read
The UK Autumn Budget 2025, delivered by Chancellor Rachel Reeves on 26 November, has introduced a series of targeted reforms with significant implications for wealth planning, cross-border structures, and international investors.
While headline rates for income tax and capital gains remain unchanged, the Budget imposes tighter rules around trusts, freezes key thresholds, and expands residence-based exposure — moves that, in aggregate, could substantially increase long-term tax liabilities for high-net-worth individuals, non-doms, and globally mobile families.
This article breaks down what changed, what stayed off the table, and what actions investors should now consider to protect wealth, plan legacies, and reassess residency structures.
Overview of UK Budget 2025: Wealth and Capital Now in Focus
The 2025 Budget confirms a clear shift: the UK is targeting wealth, capital, property, savings, and dividends more aggressively than before.
Building on earlier changes — including the scrapping of the non-dom regime in April 2025 — this year’s measures add to a growing tax burden on investment and legacy structures.
While headline rates remain mostly unchanged, the direction is clear. The UK tax environment is tightening for high-net-worth individuals, expats, and globally mobile families.
Here’s what matters by category.
Implications for Inheritance Planning & Trusts
HT Thresholds Remain Frozen
Nil-Rate Band (NRB): Still fixed at £325,000
Residential NRB (RNRB): Also frozen
Impact:
Asset appreciation and inflation will push more estates over the threshold.
Increased IHT exposure for families over time.
Less reliance on inflation-based threshold creep — more need for proactive structuring, gifting, or trust use.
Cap Introduced on Business & Agricultural Reliefs
From April 2026, 100% IHT relief on Business Property Relief (BPR) and Agricultural Property Relief (APR) will be capped at £1 million.
Affects estates built on family businesses or farms — limiting the ability to pass on these assets tax-free.
Families may need to consider:
Succession restructuring
Early ownership transfers
Alternative preservation strategies
Trust Reform: Exit Charges Now Capped (But Only for Large Trusts)
New IHT regime post-April 2025:
Domicile is no longer the test — “long-term UK residence” now triggers exposure.
Once the settlor becomes a long-term resident, excluded property trusts are brought into the relevant property regime, attracting:
10-yearly charges (up to 6%)
Exit charges when capital is distributed
Budget 2025 Change:
A £5 million cap per 10-year cycle introduced retroactively (from 6 April 2025)
Only applies to trusts that:
Held excluded property as of 30 October 2024
Have assets exceeding ~£83 million (below that, the 6% charge wouldn’t exceed the cap)
Takeaway:
The cap offers limited benefit — only to very large trusts.
Most international families, expat settlors, or non-doms remain subject to full UK IHT once residency thresholds are met.
Trust-based planning is now more complex and cost-sensitive.
If your estate includes UK property, family business assets, or offshore trusts, now is the time to review your inheritance strategy. Speak with our experts at Global Investments for structured, cross-border advice on how to preserve generational wealth.
Implications for Non-Doms, Expatriates & International Investors
No Return to the “Non-Dom” Regime
The abolished non-dom regime has not been reinstated.
Domicile status no longer applies — replaced by “long-term UK residence” as the key tax trigger.
Wealth structures based on domicile exclusions must now be reassessed under the new rules.
No reversals or grandfathering beyond limited trust caps.
Trust IHT Cap – Narrow in Scope
A £5 million cap per 10-year cycle applies only to:
Trusts settled before 30 Oct 2024, and
Trusts with net assets exceeding ~£83M
For most expats and international families:
The cap offers no real relief
New trusts or smaller existing structures remain fully exposed to IHT under the relevant property regime
No Exit Tax — But Risk Remains
No “exit tax” introduced in the 2025 Budget — UK leavers are not penalized at the point of departure.
However, ongoing exposure to UK tax persists if:
Assets remain UK-situated
The individual re-establishes long-term UK residence
The overall direction is clear: tighter rules, more aggressive taxation of internationally mobile wealth.
Property & Wealth Remain Key Tax Targets
A new “High-Value Council Tax Surcharge” (informally: mansion tax) will apply to UK homes valued over £2 million
The UK government continues to rely on:
Capital income
Trust distributions and savings...as major future tax sources
No changes (yet) to:
Income tax on labour earnings
Capital Gains Tax (CGT) on most assets→ Some stability for now — but future changes can’t be ruled out
Strategic Takeaway for International Investors
The risk/reward profile for holding UK real estate, trusts, or investments via offshore structures has shifted.
Investors should review:
Tax residency exposure
Trust and estate structures
UK property holdings and leverage strategies
Action is especially critical for those planning to return to the UK or retain UK-based assets over the long term.
Income, National Insurance, Pensions, Savings & Dividends
While the Budget focuses heavily on wealth, trusts and inheritance, several income‑related changes materially affect high earners, expatriates and investors.
Tax Threshold Freezes: Ongoing Fiscal Drag
Income tax thresholds and National Insurance (NIC) secondary thresholds remain frozen until April 2031.
As earnings, inflation, and investment income rise, more income is pushed into higher tax bands.
Headline tax rates stay the same, but the effective tax paid increases over time.
For high earners and investors, this functions as a stealth tax increase through fiscal drag.
Pension Planning: Salary‑Sacrifice Advantage Curtailed
From 6 April 2029:
Only the first £2,000 per year of salary‑sacrifice pension contributions will remain NIC‑free.
Contributions above £2,000 will be subject to employee and employer NICs.
Core pension structures remain in place, but:
One of the most effective income‑sheltering tools for high earners is significantly weakened.
This increases the importance of:
Early pension planning
Alternative long‑term wealth and retirement structures
Savings, Dividends & Rental Income: Higher Tax Likely
The Budget signals further tightening of tax on:
Savings income
Dividends
Trust and investment distributions
Market and adviser commentary points to:
Potential +2% increases in dividend and savings tax rates from 2026/27.
For HNWIs and expats with UK‑source passive income:
The UK becomes less attractive as a long‑term income base.
Jurisdictional diversification and non‑UK income structures gain importance.
Key Investor Takeaway
Income‑based planning is becoming less tax‑efficient in the UK.
Fiscal drag, pension changes, and rising capital‑income taxes combine to:
Reduce net returns
Increase long‑term tax leakage
High earners and expatriates should reassess:
Income location
Reliance on UK‑source passive income
If you’re an international investor, expat, or trust beneficiary with UK ties, now is the time to revisit your structures. Speak with our cross-border planning team at Global Investments for bespoke advice on navigating the UK’s new tax landscape — and protecting your long-term wealth.
Capital Gains Tax (CGT) & Corporate Tax – Budget 2025 Overview
No Major CGT Rate Changes
CGT rates on most asset disposals remain unchanged.
Offers continuity for investors and business owners planning exits or disposals.
A rare area of stability amidst broader tax tightening.
Corporate & Business Tax: Stability with Subtle Tightening
No overhaul to the corporate tax regime — UK remains attractive for investment structures.
Key changes:
Employee Ownership Trust (EOT) relief cut from 100% to 50%.
Capital allowances for main rate assets are adjusted — this may impact real estate and capital-intensive sectors.
Strategic Implications
The framework stays broadly supportive, but generous reliefs are being rolled back.
Policy tilt: preserving investment environment while ensuring capital contributes more.
What the Budget Didn’t Change — Key Points for HNWIs
Several widely anticipated changes were not introduced in the 2025 Autumn Budget:
No exit tax for individuals leaving the UK
No new wealth tax beyond existing IHT reforms
No increase in Capital Gains Tax (CGT) rates on most asset classes
No changes to general income tax rates on labour earnings
No changes to existing pension pots, aside from the future cap on salary-sacrifice NIC exemptions
These omissions may offer short-term relief for HNWIs, non-doms, and expats — providing time to restructure and plan ahead before further potential reforms.
What the Budget Means for Internationally Mobile Families and Global Wealth Structures — Key Risks & Strategies
1. Legacy & Estate Planning Requires Urgent Review
IHT thresholds are frozen until at least 2031, while reliefs like BPR/APR are being curtailed.
Estates once below the IHT threshold may now be liable.
Families with business/farm assets should reassess ownership, explore lifetime transfers, or consider restructuring via trusts or companies.
Delaying action may lead to avoidable tax burdens at death or compound liabilities across future generations.
2. Trusts & Offshore Structures Face New Exposure
The end of the non-dom regime shifts the focus to UK residency as the trigger for tax.
Excluded property trusts are now vulnerable once the settlor is deemed a long-term UK resident.
The new £5M IHT cap on 10-year/exit charges only applies to pre-30 Oct 2024 trusts.
Families spending even a few years in the UK could expose offshore assets to IHT.
Strategic trust structuring and residency planning are now critical.
3. Fewer Safe Havens for Income & Savings
Salary-sacrifice pension NIC benefits capped at £2,000/year from 2029.
Tax on savings/dividend income expected to rise (e.g. +2 percentage points).
Frozen tax bands = more people dragged into higher-rate tax brackets.
UK no longer competitive for sheltering passive income — alternative jurisdictions may offer better planning options.
4. Property Now Firmly in the Crosshairs
New “High Value Council Tax Surcharge” applies to homes >£2M.
Clear policy shift toward increasing taxation of property ownership.
Offshore investors in UK real estate face higher exposure to IHT and ownership costs.
Long-term property hold strategies may need revisiting.
5. Business & Corporate Reliefs Trimmed
CGT and corporate tax remain largely unchanged — but generous reliefs are being cut.
EOT (Employee Ownership Trust) relief has been reduced from 100% to 50%.
Increased complexity for family-owned businesses and private entrepreneurs.
Owners should reassess structures: personal vs corporate vs offshore holding entities.
What HNWIs, Global Investors and Expat Families Should Do Next
Given the cumulative effect of the 2025 changes — combined with the 2024 non-dom overhaul — here are some recommended actions (or areas to urgently review):
Conduct a full wealth-and-estate audit now: Review all assets (UK and global), trusts, pensions, companies, real estate, business interests — and run projections under the new IHT, trust charge and threshold-freeze rules.
Reassess trusts and offshore structures: If you have trusts established before 30 Oct 2024, check whether they qualify for the £5 M cap; if not — or if you are contemplating new trusts — think carefully about the cost of “relevant property regime” IHT charges. For many, alternative structures may offer better estate-tax efficiency.
Review pension and savings strategies: Given the headwinds on salary-sacrifice pensions and likely tax rises on dividends/savings income, consider diversification — perhaps outside the UK — or alternative jurisdictions if you have flexibility.
Re-evaluate UK property holdings: High-value properties may become more costly to hold over time. Those seeking to pass on property-rich estates should consider structuring, gifting, or ownership transfers now while IHT reliefs remain somewhat intact.
Consider residence/domicile risk carefully: For expatriates or frequent movers, it’s increasingly risky to assume UK couldn’t become relevant again. “Long-term residence” may bring trusts and even personal assets into scope — so careful planning around domicile, residence history, and migration patterns is essential.
Engage specialist legal and tax advisers: The 2025 Budget introduces a range of technical changes, some retroactive, some prospective, and many dependent on interpretation (e.g., what counts as long-term residence, how relief caps are applied, how exit charges are calculated). Expertise will be critical.
Conclusion
The 2025 UK Budget didn’t introduce an exit tax or raise CGT — but it marked a clear shift in strategy. For high-net-worth individuals, non-doms, and globally mobile investors, the direction is unmistakable: a tightening regime targeting capital, property, offshore structures, and intergenerational wealth.
The abolition of the non-dom regime, increased IHT exposure based on residence, and reduced protection for trusts signal a move away from passive reliefs toward active enforcement.
While there’s still room for tax-efficient structuring — no new wealth tax (yet), no CGT hike, no exit tax — that space is narrowing.
Now is the time to review trusts, succession plans, and residency strategies — before the next round of reforms makes action harder.
For tailored advice based on your specific goals and circumstances, speak with our experts at Global Investments. A focused review now could make a decisive difference to your long-term tax exposure and wealth strategy.