How the Autumn Budget impacts UK expats

We outline the key changes that could affect UK nationals living abroad and the way you structure your finances.

Following weeks of speculation and an early leak of the Office for Budget Responsibility’s findings, Chancellor Rachel Reeves delivered the 2025 Budget on 26 November 2025, describing it as a set of “fair and necessary choices” to support the government’s agenda for change.

The measures are not expected to take effect until April 2026 at the earliest and while the UK Autumn Budget may not apply to you directly, those with UK assets or any exposure to the UK tax system could be impacted by certain measures. We therefore consider it important to keep you updated.

UK National Insurance contribution changes

One of the measures to come into effect is the removal of access to pay voluntary Class 2 NICs abroad, and increase the initial residency or contributions requirement to pay voluntary NICs outside of the UK to 10 years.

Our guidance:

For some expats, changes to National Insurance contributions announced in the Autumn Budget are unlikely to have a direct impact whilst they remain non-resident.

However, National Insurance remains an important consideration for those who retain UK employment ties, are working overseas temporarily, or are considering a future return to the UK.

Although you will no longer be able to contribute using the cheaper class 2 voluntary contributions from April 2026, you may be able to pay class 3 contributions if you have spent more than 10 years outside of the UK. You should therefore consider topping up Class 2 contributions whilst you have the ability to do so, and review your long-term State Pension entitlement to consider what future funding may be required to maximise your State Pension income in retirement.

Property Tax Changes in the UK

Changes to Property Tax may be of particular interest for those with property remaining in the UK.

For clients living overseas, UK rental income remains taxable in the UK regardless of tax residence. The introduction of separate, higher UK tax rates for property income, 22% (basic), 42% (higher) and 47% (additional) from 6 April 2027 means higher tax bills on UK rental income. If you currently pay Income Tax on your UK property profits at 20%, 40% or 45%, each band will rise by 2–3%. This means your net rental income will fall, unless rents rise or costs change.

The Non-residents’ rate determination stays tied to UK taxable income and means that even as a non-UK resident, your tax band is still based on your UK-source income only. If your UK rental profits push you into the higher-rate band, you’ll face the new 42% rate. Those with significant rental portfolios or high UK income could fall into the new 47% additional rate.

Mansion Tax is another concern for many homeowners – including those living abroad with property in the UK. A High Value Council Tax Surcharge (HVCTS) will be coming into effect in April 2028. It is based on property value, not purchase price and will be applied as so:

Property value (England)    Annual surcharge (HVCTS)

£2.0 m – £2.5 m                    £2,500

£2.5 m – £3.5 m                    £3,500

£3.5 m – £5.0 m                    £5,000

£5.0 m and above                 £7,500

Our guidance:

Under the new rules, this could have significant implications for non-resident landlords and international property investors. As stated above, from April 2027, new separate tax rates will be adopted and this change applies to income from UK property wherever you are resident, thus directly reducing the rental yields received.

Furthermore, if you’re a high-net-worth expat with a UK home valued above 2 million GBP, the introduction of the new annual High Value Council Tax surcharge represents a notable increase in holding costs which could be 2,500 GBP, but as high as 7,500 GBP for homes valued above 5 million GBP.

These changes could have significant impact in terms of the ongoing costs of holding UK property and you should therefore consider your ownership structures for property and how this will impact your immediate expenditure, income and long- term personal cash flow planning.

Changes to Uk Inheritance Tax (IHT)

Under the new rules announced last month, if you’ve spent 10 out of the last 20 years living in the UK for tax purposes, you’ll be treated as a long-term resident. This means that once you fall into that category, the UK can charge Inheritance Tax on everything you own worldwide, not just the assets you hold in the UK.

Our guidance:

This is a significant change from a domicile based IHT system to a residency-based system.

This means that if you are a long term expat who is planning a return to the UK, you will need to consider the timing of your relocation back to the UK, as this could impact your long-term non-resident status, particularly if you have spent close to 10 out of the last 20 years outside of the UK for tax purposes.

You will also need to consider that worldwide assets (not just UK) could then be brought under the scope of UK IHT if you satisfy the long-term UK resident test, which may not have been the case in the past whilst you were deemed non-resident.

Frozen ISA allowances

From April 2027, if you’re under 65 you’ll only be able to put £12,000 a year into a Cash ISA. If you want to use your full £20,000 ISA allowance, the remaining £8,000 must be put into a Stocks & Shares ISA. Essentially, many will be nudged towards investing rather than keeping everything in cash.

Again, depending on how long you have lived outside of the UK, the rules will differ.  Although you may keep any ISA you originally hold, if you become a non-UK tax resident, you’re no longer qualified to put money into UK ISAs. As a resident abroad, ISAs could also be viewed as foreign investment accounts and be taxed at the local rate, meaning their initial tax-free benefits are no longer so.

Although this won’t impact non-residents on a day-to-day basis because you can’t contribute to new ISAs, it is essential that you plan before returning to the UK. For example, your spouse or partner may be a UK resident in which case you should consider maximising their contributions whilst they can still contribute.

You should also consider how to maximise contributions to other tax-efficient wrappers sooner rather than later, and manage gains in other assets such as property, pensions or General Investment Accounts whilst non-resident accordingly so that you have a plan in place to draw income and capital tax-efficiently when you return.

We are here to support you

Our team of professionals are here to support you as a UK expat and despite future changes, it is our goal to keep your financial plan on track. There is time to prepare and make any changes needed before the above measures come into effect, so open communication with a financial planner is key and can provide peace of mind while you enjoy your living your life overseas. Contact our team here for more guidance.

Tax treatment depends upon individual circumstances and is based on current UK tax legislation, that is subject to change at any time.