Headlines predicted sweeping changes to capital gains tax, pensions, and more. Our advice was simple: wait for facts, don’t act on rumours.

As per last year’s mania, we encouraged clients to take a “wait and see” approach. That patience has been rewarded.

The Chancellor delivered no changes to capital gains tax or VAT, and no substantial pension reforms. For clients who resisted the urge to make hasty decisions based on speculation, this is welcome news. The big changes
many feared simply didn't arrive.

What did arrive were smaller, targeted adjustments aimed at increasing tax collection over time. None of these changes should force anyone into rushed decisions. Let's look at the main announcements.

Tax Thresholds Extended

The freeze on income tax thresholds will now continue until 2031, three years longer than previously planned. This means any pay rise could push more of your income into a higher tax bracket. This "fiscal drag" has
been with us for some time and will now be with us for longer.

High-Value Property Council Tax (Mansion Tax)

From April 2028, homes in England valued at £2 million or more will face a council tax surcharge. The surcharge will range from £2,500 for properties valued between £2 million and £2.5 million, up to £7,500 for properties
valued at £5 million or more. This will require revaluations of properties in the top council tax bands for the first time since 1991. Around 100,000 properties will be affected, primarily in London and the South East.

Cash ISA Allowance Reduced

From April 2027, the annual cash ISA allowance for those under 65 will fall from £20,000 to £12,000. The government's stated aim is to encourage more investment in growth assets. For most of our clients, this aligns
with what we already recommend. Growth assets remain the most reliable way to build long-term wealth and outpace inflation.

Salary Sacrifice Pension Cap

From April 2029, a £2,000 annual cap will apply to pension contributions made through salary sacrifice arrangements. This affects around a third of private sector employees who currently benefit from national insurance
savings through these schemes. Income tax relief on pension contributions remains unchanged, but this will reduce the incentive for some earners. The impact will vary depending on your specific circumstances.

Dividend Tax

From April 2026, dividend tax rates will increase by two percentage points for most taxpayers. The basic rate rises to 10.75% and the higher rate to 35.75%. The additional rate remains unchanged at 39.35%. For clients
who receive dividend income from investments or business interests, this should be factored into your planning.

Property and Savings Income Tax

Tax rates on property income and savings income will increase by two percentage points from April 2027. The new rates will be 22%, 42%, and 47% for basic, higher, and additional rate taxpayers, respectively.

Electric Vehicle Road Pricing

As fuel duty revenues decline with the shift away from petrol and diesel vehicles, the government is looking to replace that income. From 2028, electric and hybrid vehicle drivers will face new charges for using
the roads. This will be a per-mile charge in addition to existing road taxes.

The Value of Waiting

On a positive note, the state pension will rise by 4.8% in April, in line with average wage growth. Regulated rail fares in England will be frozen until March 2027, and fuel duty remains frozen until September 2026.
These won't transform anyone's financial plan, but they're worth knowing about.

Looking back at the speculation from recent weeks, much of it missed the mark. Those who made significant changes based on rumoured CGT increases or pension overhauls would now be reconsidering those decisions. This
is why we advocate patience. Facts beat speculation (almost) every time.

The changes announced are manageable. Most are phased in over the coming years, giving us time to plan thoughtfully rather than react hastily.

As always, every client's situation is different. Some of these changes will affect you more than others. At our next meeting, we'll discuss what this means for your specific circumstances and whether any adjustments
make sense.

If you have immediate questions, please get in touch. We're here to help you navigate these changes with clarity and confidence.