The Chancellor’s Autumn Budget (26 November 2025) delivered fewer surprises than the headlines suggested, but several measures will still matter for internationally mobile individuals, British expats, and anyone with UK-based assets.
For most clients the overall impact will be manageable, but four groups should take particular note:
- British expats considering voluntary National Insurance (NI) top-ups.
- Non-resident landlords with UK rental income.
- Owners of UK residential property worth £2 million+.
- Investors with UK-taxable savings, dividends or chargeable event gains.
Below is our expert breakdown of what has changed — and what it means for those living abroad or managing UK-based assets.
What You Will Learn
- How the Budget changes affect British expats, including the tightening of voluntary National Insurance rules and the new 10-year residency requirement.
- What the new tax landscape means for landlords and investors, from higher property, dividend and savings tax rates to the impact on portfolio bonds.
- How high-value UK property ownership is changing, including the new annual surcharge for homes worth £2 million or more.
- Why a crucial IHT planning window remains open, despite not being part of this year’s Budget, ahead of major reforms arriving in 2025–2027, especially for expats with UK assets or pensions.
1. Voluntary National Insurance for Expats Is Being Tightened (from 6 April 2026)
The Government is closing loopholes in the current Voluntary National Insurance Contribution (VNIC) rules to prevent individuals with only limited UK ties from building State Pension entitlement at the lowest rate while living abroad.
Two significant reforms are now confirmed:
- Access to Class 2 VNICs will be removed for individuals abroad: Class 2 contributions, long the most cost-effective route for expats to maintain their State Pension record, will no longer be available from 6 April 2026.
- A 10-year initial UK residency or contribution history will be required before paying any VNICs from overseas: This prevents people with very limited UK history from building entitlement from abroad.
How This Affects Expats
- The cost of building or maintaining State Pension entitlement will increase once Class 2 closes.
- Backdating at the current lower NI rates before April 2026 may offer significant value.
- Those with gaps, intermittent residence or non-standard contribution histories should review urgently.
For years, Class 2 NI has been an underappreciated financial advantage for expats. Its removal significantly shifts the economics of international retirement planning and places a premium on forward planning.
2. New Property Income Tax Rates (from April 2027)
Income tax on UK property will rise by 2 percentage points across all bands, creating a dedicated property income schedule:
- 22% basic rate
- 42% higher rate
- 47% additional rate
Mortgage interest relief will continue as a tax credit at the 22% basic property rate.
For non-resident landlords, the Non-Resident Landlord Scheme (NRLS) will remain, with withholding aligned to the new basic property rate.
How This Affects Expat Landlords With UK Property
- Highly leveraged investors will feel the greatest impact.
- Incorporation and financing structures may need reconsideration.
- International investors accustomed to stable net yields should re-run cash-flow projections.
Property income is now being separated from general income tax, a signal that UK real estate is being positioned as a taxable asset class in its own right. Cross-border landlords must plan accordingly.
3. Dividend and Savings Income Taxes Are Increasing
Two further 2-percentage-point increases will affect globally mobile investors:
Dividend tax (from April 2026)
- 10.75% (basic)
- 35.75% (higher)
- 39.35% (additional – unchanged)
Savings income tax (from April 2027)
- 22% (basic)
- 42% (higher)
- 47% (additional)
Portfolio Bonds
Gains on portfolio (investment) bonds are treated as savings income for UK tax purposes. As the Budget increases savings-income tax rates by 2 percentage points from April 2027, chargeable event gains arising while an individual is UK-tax resident will fall into the new rates of:
- 22% (basic)
- 42% (higher)
- 47% (additional)
Importantly, while the tax rates on savings income are rising, none of the core portfolio-bond planning advantages have been changed. All existing features remain in place, including:
- Gross roll-up of return.
- The 5% annual tax-deferred withdrawal allowance.
- Top-slicing relief.
- Time-apportioned reduction (TAR).
- The ability to assign segments without triggering tax.
Portfolio bonds therefore continue to offer a flexible and tax-efficient structure for clients planning a UK return or managing cross-border investment income, even though the tax rates applying to gains will be higher from 2027.
What This Means For Expats and Returning Residents
- There are planning opportunities in optimising timing before April 2026/2027.
- Sequencing becomes even more important for those drawing down worldwide income.
- Portfolio bonds remain central to UK repatriation planning despite the rate rises.
Incremental changes to dividend and savings tax may appear minor individually, but together they signal a policy tilt away from passive income. For international clients who live off investment returns, sequencing, allowances and timing now matter more than ever.
4. New Annual Surcharge on UK Properties Worth £2m+ (from April 2028)
The High Value Council Tax Surcharge will apply to residential properties in England valued at £2 million or more, with annual charges:
- £2,500 for homes valued £2m–£2.5m
- £3,500 for £2.5m–£3.5m
- £5,000 for £3.5m–£5m
- £7,500 for £5m+
These amounts will rise with CPI from 2029–30.
How This Affects Expats
- Annual holding costs for high-value UK property will increase.
- Structures and ownership approaches may need reviewing, particularly where multiple properties or leveraged assets are involved.
- Cash-flow planning should account for these recurring charges.
This measure formalises high-value homeowners as a distinct taxable group, a structural change rather than a one-off revenue adjustment.
What Should Expats and International Clients Do Now?
- Expats with NI gaps: Evaluate your position well before 6 April 2026. The removal of Class 2 NI is one of the most financially significant changes for expats in over a decade.
- Non-resident landlords: Run forward projections under the new 2027 property income rates. Financing, debt levels, and ownership models may need adjusting.
- Investors with UK-taxable passive income: Optimise timing, allowances and withdrawal sequencing ahead of the dividend rate rise in 2026 and the savings-income rate rise in 2027.
- High-value property owners: Incorporate the new annual surcharge into long-term holding decisions, cash-flow planning and estate strategy.
- Book a complimentary review: Schedule a no-obligation consultation with us to review how the Budget changes affect your NI position, UK property, and investment strategy, and to ensure your cross-border financial plan remains aligned with your goals.
Still Open: The Most Important IHT Planning Window for Expats in a Generation
Major reforms to the UK’s inheritance tax system are already underway. From 6 April 2025, IHT shifted from a domicile-based regime to a residence-based framework — the biggest structural change in decades for expats. These reforms create a valuable, but time-limited, opportunity for expats to review their estate structures before the new rules fully bed in.
What’s Changing?
- IHT has moved from domicile to residence: Under the new regime, exposure to UK IHT on non-UK assets depends primarily on where you live and for how long, rather than historic UK domicile. This means:
- Long-term UK residents may become liable to IHT on worldwide assets, even if they were never UK-domiciled.
- Individuals who leave the UK may bring their non-UK assets out of IHT scope, but typically only after completing a “tail” period following departure. UK-situs assets remain within IHT regardless of residence.
- Pension-related IHT changes from 2027: As part of the wider reforms, the government has confirmed that from 6 April 2027 most unused pension funds and death benefits will be brought into scope for IHT, with detailed rules still being finalised. These changes may affect:
- UK pension arrangements held by expats.
- Some international pensions with UK connections, depending on situs and scheme structure.
- How death benefits are structured and how beneficiaries are chosen.
Why the Planning Window Matters
Because the new residence-based rules apply now, and pension-related reforms are due to take effect from April 2027, expats now have a limited window to:
- Assess whether they will fall inside or outside the new residence-based IHT framework.
- Review pension arrangements ahead of the 2027 changes.
- Revisit gifting, trusts and UK property strategies before the full package of changes is in force.
For many expats, the next 12–24 months represent the most important IHT planning period in a generation.
Further Guidance and Resources
To help you prepare for the IHT transition, you can access our dedicated materials here:
These resources walk through the reforms in detail and outline the key actions expats should consider.
Complimentary Autumn Budget 2025 Impact Review
The confirmed reforms to voluntary NI, property taxation, savings income and high-value homes create meaningful implications for British expats, returning residents and cross-border investors. Understanding how these changes interact with your residency status, pension record, investments and UK property holdings is essential.
In a complimentary introductory consultation with Titan Wealth International, you will:
- Review how the Budget changes affect your NI position, UK property, and UK-taxable investment income.
- Identify planning opportunities: from NI backdating to investment sequencing and property structuring, before the changes take effect.
- See how Titan Wealth International can support you in building a tax-efficient, globally aligned financial strategy.
Key Takeaway
The 2025 Autumn Budget introduces important changes for expats, from the closure of Class 2 NI and higher taxes on property and investment income to a new annual surcharge on high-value UK homes.
And while not part of this year’s Budget, major IHT reforms have created a critical planning window for expats with UK assets, pensions or ongoing ties.
Reviewing your position early ensures you stay ahead of rising taxes and shifting rules, and can take full advantage of the planning opportunities still available.
Titan Wealth International can guide you through these changes and help build a clear, tax-efficient strategy aligned with your cross-border lifestyle and long-term goals.
The information provided in this article is not a substitute for personalised financial, tax or legal advice. You should obtain financial advice and tax advice tailored to your particular circumstances and in respect of any jurisdictions where you may have tax or other liabilities. Titan Wealth International accepts no liability for any direct or indirect loss arising from the use of, or reliance on, this information, nor for any errors or omissions in the content.
