The Autumn UK Budget and what it means for British expats
28th November 2025
The Autumn Budget always attracts attention, but this year’s announcement carried more weight than usual. With pressures on public finances, the government set out a package of tax increases, reforms and spending commitments aimed at stabilising the UK’s fiscal position while offering targeted relief for households. Although much of the commentary has focused on the implications for UK residents, there are (for us) important considerations for British expats and globally mobile individuals who still have financial ties to the UK.
This week we take a detailed look at the Budget’s key measures, before considering where expatriates may be affected and what actions may be appropriate as part of a well-structured long-term plan.
This week we take a detailed look at the Budget’s key measures, before considering where expatriates may be affected and what actions may be appropriate as part of a well-structured long-term plan.
Headline measures from the Autumn Budget
The overriding message of the Budget was one of fiscal consolidation. The government announced a range of tax rises and tightened rules intended to increase revenues, alongside increases to certain benefits and the state pension.
Dividend tax rates will rise from April 2026. The basic rate will increase to 10.75 per cent and the higher rate to 35.75 per cent, reducing the net yield for anyone receiving dividends outside a tax-efficient wrapper. This includes non-UK residents with UK-sourced dividend income, as dividend tax remains a UK liability regardless of where the investor lives.
The Budget also confirmed long-trailed reforms to salary-sacrifice pension contributions. From April 2029, the advantage of using salary sacrifice to boost pension funding will be capped at £2,000 per year. This is less relevant for those already abroad, but it will matter for anyone who still holds UK employment or plans to return.
The overriding message of the Budget was one of fiscal consolidation. The government announced a range of tax rises and tightened rules intended to increase revenues, alongside increases to certain benefits and the state pension.
Dividend tax rates will rise from April 2026. The basic rate will increase to 10.75 per cent and the higher rate to 35.75 per cent, reducing the net yield for anyone receiving dividends outside a tax-efficient wrapper. This includes non-UK residents with UK-sourced dividend income, as dividend tax remains a UK liability regardless of where the investor lives.
The Budget also confirmed long-trailed reforms to salary-sacrifice pension contributions. From April 2029, the advantage of using salary sacrifice to boost pension funding will be capped at £2,000 per year. This is less relevant for those already abroad, but it will matter for anyone who still holds UK employment or plans to return.
On the estates and inheritance side, Business Property Relief and Agricultural Property Relief will be capped from April 2026. Currently these reliefs can shelter qualifying assets from inheritance tax at 100 per cent. Under the new regime, the 100 per cent relief will apply only to the first £1 million of value, with any excess receiving 50 per cent relief. Importantly, this cap is not transferable between spouses. This is a substantial tightening of the rules and could materially change the tax treatment of UK business interests and certain investment structures held within an estate.
The government also confirmed that high-value UK residential property will face an additional annual charge from 2028 for properties valued above £2 million. This applies irrespective of where the owner is resident.
Finally, one of the most consequential changes for expats relates to voluntary National Insurance. The government will remove access to the lower-cost Class 2 voluntary NI contributions for individuals living abroad. Additionally, there will be a requirement for at least 10 years of UK residence or contributions before voluntary NI becomes available in the future. For many expats, this closes off what was previously a cost-effective method of securing or increasing entitlement to the UK State Pension.
Why this matters to British expats
While many of the Budget’s measures target the UK domestic economy, several have clear implications for British nationals living overseas. Expatriates commonly retain UK property, investments, pensions or a desire to maintain their UK state pension entitlement. Understanding the potential impact of the Budget is therefore important for long-term planning.
The removal of access to Class 2 National Insurance is likely to be the most immediate source of concern. For years, expats have been able to top up their UK NI record at a relatively low annual cost, ensuring they maintain eligibility for the State Pension. With that option withdrawn, expats without the required contribution history will need to reassess whether topping up remains viable, and whether the cost now justifies the long-term benefit.
The government also confirmed that high-value UK residential property will face an additional annual charge from 2028 for properties valued above £2 million. This applies irrespective of where the owner is resident.
Finally, one of the most consequential changes for expats relates to voluntary National Insurance. The government will remove access to the lower-cost Class 2 voluntary NI contributions for individuals living abroad. Additionally, there will be a requirement for at least 10 years of UK residence or contributions before voluntary NI becomes available in the future. For many expats, this closes off what was previously a cost-effective method of securing or increasing entitlement to the UK State Pension.
Why this matters to British expats
While many of the Budget’s measures target the UK domestic economy, several have clear implications for British nationals living overseas. Expatriates commonly retain UK property, investments, pensions or a desire to maintain their UK state pension entitlement. Understanding the potential impact of the Budget is therefore important for long-term planning.
The removal of access to Class 2 National Insurance is likely to be the most immediate source of concern. For years, expats have been able to top up their UK NI record at a relatively low annual cost, ensuring they maintain eligibility for the State Pension. With that option withdrawn, expats without the required contribution history will need to reassess whether topping up remains viable, and whether the cost now justifies the long-term benefit.
Dividend tax increases will affect any expat with UK-sourced dividend income. Unlike most forms of income, UK dividends remain taxable in the UK even when the recipient is non-resident. This means those relying on UK shares for income, held outside tax-efficient structures, will face a reduction in net yield. This could reinforce the case for reviewing portfolio structure and, where appropriate, relocating assets into more efficient wrappers.
The new surcharge on high-value property will matter for expats who have kept UK homes, particularly those in London and the South East where valuations frequently exceed the £2 million threshold. Non-resident landlords already face specific tax obligations, and this additional charge will increase the ongoing cost of holding such property.
The changes to Business Property Relief and Agricultural Property Relief are also significant. Many expatriates still own UK businesses or hold business-related investments. The reduction in available relief means that a larger proportion of such assets could fall within the scope of inheritance tax, potentially increasing the liability on an estate. For families with intergenerational plans or those expecting to pass UK assets to children or grandchildren, this warrants a review of existing arrangements.
Pension rules remain a central part of many expats’ long-term strategies. While the salary-sacrifice cap is more relevant for UK residents, any reduction in pension tax advantages naturally plays into decisions around whether to retain UK pensions, contribute further, or explore international alternatives. Coupled with the changes to National Insurance, expats should ensure that their retirement plans are still aligned with their goals.
The new surcharge on high-value property will matter for expats who have kept UK homes, particularly those in London and the South East where valuations frequently exceed the £2 million threshold. Non-resident landlords already face specific tax obligations, and this additional charge will increase the ongoing cost of holding such property.
The changes to Business Property Relief and Agricultural Property Relief are also significant. Many expatriates still own UK businesses or hold business-related investments. The reduction in available relief means that a larger proportion of such assets could fall within the scope of inheritance tax, potentially increasing the liability on an estate. For families with intergenerational plans or those expecting to pass UK assets to children or grandchildren, this warrants a review of existing arrangements.
Pension rules remain a central part of many expats’ long-term strategies. While the salary-sacrifice cap is more relevant for UK residents, any reduction in pension tax advantages naturally plays into decisions around whether to retain UK pensions, contribute further, or explore international alternatives. Coupled with the changes to National Insurance, expats should ensure that their retirement plans are still aligned with their goals.
Strategic considerations for long-term planning
Taken together, this Budget represents a tightening of several long-standing reliefs and a rise in the effective tax burden across multiple areas. For British expats, it highlights the importance of periodically reviewing UK-linked assets as personal circumstances evolve.
We continue to see clients who, despite living overseas for many years, still have UK investments, property, pensions or family interests that create UK tax exposure. The Autumn Budget reinforces the need to ensure that these arrangements are still appropriate. In many cases, international investment platforms or overseas pension structures can offer more favourable long-term outcomes, particularly for individuals who no longer intend to return to the UK.
Where clients retain UK property, the introduction of further surcharges on high-value homes may influence the decision to hold or divest. For investment portfolios, the upcoming dividend tax rises may shift the balance further in favour of globally diversified, low-cost funds housed within tax-efficient wrappers. For estate planning, the new limits on BPR and APR will mean that families relying on these reliefs need to revisit their structure well ahead of April 2026.
For those relying on future access to the UK State Pension, the removal of Class 2 NI and new residency requirements could have a long-term impact on expected benefits. The decision to continue voluntary NI contributions needs to be assessed carefully, particularly for expats with a limited UK contribution record.
The importance of professional cross-border advice
International financial planning requires careful navigation of tax regimes, cross-border pension rules and the interaction between residency and domicile. With the UK making material changes in several areas, the case for structured, jurisdiction-aware planning has never been stronger.
At Brigantia, we focus on ensuring that our clients’ long-term strategies remain effective, tax-efficient and resilient as laws evolve. Our role is to review the implications of developments like the Autumn Budget, consider how they apply to each individual’s circumstances and adapt plans accordingly.
If you hold UK assets, pensions or income streams while living abroad, this is a good moment to review your position. A short discussion can help clarify the potential impact of the Budget and ensure your long-term strategy continues to support your goals.
Taken together, this Budget represents a tightening of several long-standing reliefs and a rise in the effective tax burden across multiple areas. For British expats, it highlights the importance of periodically reviewing UK-linked assets as personal circumstances evolve.
We continue to see clients who, despite living overseas for many years, still have UK investments, property, pensions or family interests that create UK tax exposure. The Autumn Budget reinforces the need to ensure that these arrangements are still appropriate. In many cases, international investment platforms or overseas pension structures can offer more favourable long-term outcomes, particularly for individuals who no longer intend to return to the UK.
Where clients retain UK property, the introduction of further surcharges on high-value homes may influence the decision to hold or divest. For investment portfolios, the upcoming dividend tax rises may shift the balance further in favour of globally diversified, low-cost funds housed within tax-efficient wrappers. For estate planning, the new limits on BPR and APR will mean that families relying on these reliefs need to revisit their structure well ahead of April 2026.
For those relying on future access to the UK State Pension, the removal of Class 2 NI and new residency requirements could have a long-term impact on expected benefits. The decision to continue voluntary NI contributions needs to be assessed carefully, particularly for expats with a limited UK contribution record.
The importance of professional cross-border advice
International financial planning requires careful navigation of tax regimes, cross-border pension rules and the interaction between residency and domicile. With the UK making material changes in several areas, the case for structured, jurisdiction-aware planning has never been stronger.
At Brigantia, we focus on ensuring that our clients’ long-term strategies remain effective, tax-efficient and resilient as laws evolve. Our role is to review the implications of developments like the Autumn Budget, consider how they apply to each individual’s circumstances and adapt plans accordingly.
If you hold UK assets, pensions or income streams while living abroad, this is a good moment to review your position. A short discussion can help clarify the potential impact of the Budget and ensure your long-term strategy continues to support your goals.
