The Budget was broad in its content. However, some key points to consider are:
- A High Value Council Tax Surcharge (colloquially known as the ‘Mansion Tax’) affecting residential properties worth £2,000,000 or more will be introduced from April 2028. Charges will commence at £2,500 per annum and will increase to £7,500 per annum for properties with a value of above £5,000,000. This affects the proprietors of such properties, not occupiers or tenants. This surcharge is in addition to existing Council Tax payments.
- A new rate of Income Tax will be introduced for rental and savings income from April 2027. The new rates will be 22%, 42% and 47% respectively reflecting the basic, higher, and additional rates of Income Tax.
- The Capital Gains Tax relief on Employee Ownership Trusts has reduced from 100% to 50%.
- National Insurance contributions relief on salary sacrifice to pensions will be capped to the first £2,000 of pension contributions from 2029.
- The late filing penalty for Corporation Tax returns will double from 1 April 2026.
- The changes to Agricultural Property Relief (‘APR’) announced in the October 2024 Budget have not substantially changed and are due to come into effect in April 2026. The 2025 Budget outlined that any unused portion of the £1,000,000 APR allowance can be transferred to a surviving spouse or civil partner. This includes if the first death was before 6 April 2026.
We suggest that should these or any of the announcements in the Budget affect you, that you should consider taking specialist tax advice.
Hallett & Co offers a broad range of services, including IHT tax planning, and can work with your tax advisers in relation to tax planning more generally.
