UK Personal Taxes

UK Autumn Budget 2025, Capital Gains Tax, Resident and Non resident individuals, CGT and Corporation Tax.

Today, Wednesday, 26^th November 2025. the Chancellor, Rachel Reeves, announced a number of changes to Capital Gains Tax (CGT), effective immediately.  The change, the majority of our clients have reacted to, is the reduction of the Capital Gains Tax Relief business owners/shareholders receive when they dispose of shares in their company to an employee ownership trust (“EOT”), from 100% to 50% of the gain on the shares being disposed of.

Before the UK Autumn Budget, provided certain criteria were met, the Capital Gains Tax Relief allowed business owners/shareholders full relief from any CGT arising on a disposal of their shares to an EOT.

From today, those individuals selling to an EOT will now be liable to CGT. It is important to note that it will not be possible to claim Business Asset Disposal Relief (“BADR”) or investors’ relief on the 50% of the gain that’s taxable.

For further information on Employee Ownership Trusts (EOT) please click: https://www.gov.uk/government/publications/capital-gains-tax-employee-ownership-trusts/capital-gains-tax-employee-ownership-trusts-relief-reduction

Incorporation Relief

Incorporation Relief allows sole traders or partners in a partnership to transfer their business, as a going concern, to a company, in exchange for shares, without triggering a Capital Gains Tax liability, provided certain conditions are met.  This Relief can reduce or eliminate the chargeable gain arising on disposal.

From 6th April 2026, Incorporation Relief will no longer apply automatically and in order to claim the Relief, the following must be provided to HMRC: (i) the type/nature of the business being transferred, (ii) full details of the transaction as well as (iii) supporting calculations and figures.  Previously, Incorporation relief was given automatically on the transfer of a business to company, wholly or mainly, in exchange for shares. This new measure will effect transfers of businesses made on/after 6^th April 2026.

For further information on Incorporation Relief, please click: https://www.gov.uk/government/publications/capital-gains-tax-incorporation-relief-claims/capital-gains-tax-incorporation-relief-claims-process

Anti avoidance – Share Exchanges and Reorganisations

From 26^th November 2025, the new legislation targets situations where an individual, company or trust enters into an arrangement, the main or one of the main purposes of which, is to secure a tax advantage, not otherwise available.  In other words, the focus of the amendments to the anti-avoidance measures, in relation to share exchanges and reorganisations, is on the purpose or the reason for the reorganisation and whether or not the main reason for the reorganisation was for the purposes of tax avoidance. The aim of this amendment is to make the scope of the relief more effective.  It should not adversely affect anyone who does not benefit from the arrangements.

For further information on the new anti-avoidance that applies to Share Exchanges and Company Reorganisations, where the main purposes is tax avoidance, please click: https://www.gov.uk/government/publications/capital-gains-tax-share-exchanges-and-reorganisations/capital-gains-tax-anti-avoidance-for-share-exchanges-and-reorganisations

Non-resident Capital Gains Tax

The rules around Non-Resident Capital Gains Tax are being tightened.  Loopholes for indirect disposals have been closed in relation to non-resident capital gains tax.  Non-UK residents are liable to UK Capital Gains Tax in relation to chargeable gains arising on the disposal of interests in UK land and holdings in “property rich” entities.  From 26^th November 2025, the definition of property-rich entities is to change in relation to Protected Cell Companies (PCC).

Protected Cell Companies are a type of company which is divided into a number of separate cells. The assets and liabilities of each cell are segregated and kept separate from each other cell.  From 26^th November 2026, when determining whether a company derives 75% of its value from UK land, each cell of a PCC must now be considered separately.  In other words, each individual PCC cell must be examined for “property richness” purposes as opposed to the entire PCC as was the case prior to 26^th November 2025.

This Budget change will apply to disposals made by PCCs on/after 26th November 2025.

For further information on Non-Resident Capital Gains Tax, please click: https://www.gov.uk/government/publications/capital-gains-tax-non-resident-capital-gains/non-resident-capital-gains

Final points:

• The annual Capital Gains Tax exempt amount will remain at £3,000 for the 2026/27 tax year.

• The rate for individuals claiming Business Asset Disposal Relief will increase to 18% for disposals made/after 6th April 2026.

For further information in the 2025 UK Autumn Budget, please click: https://www.gov.uk/government/publications/budget-2025-document/budget-2025-html

We provide a full and comprehensive UK tax service.  If you are looking for UK tax advisory or compliance services, and wish to deal with a U.K. Tax Specialist, please contact us at queries@accountsadvicecentre.ie

Please be aware that the information contained in this article is of a general nature.  It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.

UK Autumn Budget 2025, Income Tax, Personal Tax, Capital Gains Tax

The Chancellor, Rachel Reeves, delivered her Autumn Budget today, Wednesday, 26^th November 2025.  This article provides an overview of Personal Taxes under the following headings:

1. Income tax and National Insurance Contributions (NICs)

2. Inheritance tax (IHT)

3. Agricultural and business property relief

4. Pensions

5. Employee Ownership Trusts (EOTs)

6. Residential property / High Value Council Tax Surcharge

7. ISA Reform

Income tax and National Insurance Contributions (NICs)

• Income tax thresholds will remain frozen for a further three years, up to 6^th April 2031. This includes the personal allowance (which will remain at £12,570), the basic rate (up to £50,270) the higher rate threshold (£50,270 to £125,140) and the additional rate threshold (above £125,140).  The personal allowance for income tax will continue to be reduced for taxpayers with a net income of over £100,000.  This will be completely lost for income over £125,140. Through “fiscal drag” a greater number of working taxpayers will be brought into the higher tax rates as salaries and wages increase.

• The property income rates apply to England, Wales and Northern Ireland only. They do not apply to Scotland. From 6th April 2027, property income will be taxed at 22% (basic), 42% (higher), and 47% (additional).

• There will be an additional 2% surcharge on the basic and higher rates of savings income and dividend income. From 6^th April 2026, the ordinary/basic and upper/higher dividend rates will rise to 10.75% and 35.75% respectively. The additional rate will remain at 39.35%. From 6^th April 2027, the savings income basic rate will increase from 20% to 22%, the higher rate will increase from 40% to 42% and the additional rate from 45% to 47%. It is important to keep in mind that (a) the starting rate for savings will remain at £5,000 until April 2031 and (b) the way in which individuals report and pay these taxes remains the same. From 6th April 2027, Allowances and Reliefs will only be applied to (i) property income, (ii) savings income and (iii) dividend income after they have been applied to other sources of income.  Interest and dividends received from assets which are held within ISAs will continue to be tax exempt.

Inheritance tax (IHT)

IHT thresholds will remain fixed for a further year to 6^th April 2031. The £1 million allowance will be frozen until 6^th April 2031, after which it will be index-linked.  The freeze on the nil-rate band (£325,000) and residence nil-rate band (£175,000) means that the personal tax thresholds will remain unchanged until April 2031.

Agricultural and Business Property Relief

The £1 million allowance for the 100% rate of (a) Agricultural Property Relief and (b) Business Property Relief will be transferable between spouses and civil partners.  UK agricultural land and buildings, which are held through non-UK companies or similar bodies, will be brought within the scope of UK inheritance tax, from 6th April 2026.

For further information, please click: https://www.gov.uk/government/publications/changes-to-agricultural-property-relief-and-business-property-relief/agricultural-property-relief-and-business-property-relief-changes

Pensions

From April 2029, a £2,000 cap on pension contributions, made under a salary sacrifice scheme, will be introduced. This means that both employees and employers will be subject to national insurance on contributions above this amount. Employers will need to report the amounts sacrificed via their payroll software.  Normal employer pension contributions, however, will continue to remain exempt from national insurance and there is no change to the pension tax-free lump sum, on retirement. 

For further information, please click: https://www.gov.uk/government/publications/changes-to-salary-sacrifice-for-pensions-from-april-2029

Employee Ownership Trusts (EOTs)

EOTs have been around for many years.  An EOT is a Trust, which is typically a newly incorporated company, which holds the shares for the benefit of the company’s employees.  They have been gaining in popularity, in recent years, as a means for shareholders to sell their shares to the EOT, without giving rise to a Capital Gains Tax charge. From 26^th November 2025, however, the CGT relief on qualifying disposals to EOTs is halved from 100% to 50%.

For further information, please click: https://www.gov.uk/government/publications/capital-gains-tax-employee-ownership-trusts/capital-gains-tax-employee-ownership-trusts-relief-reduction

Residential property / High Value Council Tax Surcharge

What is it?

The High Value Council Tax Surcharge (HVCTS) is a new charge on owners of residential property, in England, which is worth £2m, or more, in 2026.

When does it take effect?

The new charge will take effect from 1^st April 2028.

What about existing council tax?

In addition to existing council tax, there will be an annual charge of £2,500 per annum for properties valued at over £2m, rising to £7,500 for properties valued at over £5m.

For further information, please click: https://www.gov.uk/government/publications/high-value-council-tax-surcharge

ISA Reform

Broadly, an ISA is a savings account where tax is not charged on the interest you earn. Currently, an individual can contribute up to £20,000 each tax year into a cash ISA. Alternatively, you can split this allowance between other types of ISA.   From 6th April 2027, however, the subscription limit for cash ISAs will be limited to £12,000 for those under the age of 65 years.

In summary, from 6th April 2027:

• the annual cash ISA limit will be set at £12,000 for savers under the age of 65 years,

• the overall annual ISA limit will remain at £20,000.

• Savers aged 65 and over will continue to be able to save up to £20,000, in a cash ISA, each year.

For further information, please click: https://www.gov.uk/government/publications/tax-free-savings-newsletter-19/tax-free-savings-newsletter-19-november-2025

For further information on the UK Autumn Budget 2025, please click: https://www.gov.uk/government/collections/budget-2025

If you are looking for assistance in relation to UK personal tax advice or compliance, and wish to deal with a UK Personal Tax Consultant, please contact us at queries@accountsadvicecentre.ie

Please be aware that the information contained in this article is of a general nature.  It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.

UK Taxes. International, Cross Border, Ex-pat Taxes, Business, Personal, Capital Gains Tax

When faced with a large tax bill and the administrative burden of having to file Tax Returns in two jurisdictions, people always regret not getting professional taxation advice BEFORE they completed the transaction.  Over the past number of years I’ve been contacted by several Irish citizens returning home from the UK where they’ve lived and worked for a number of years.  In the majority of cases, these individuals have had difficulty selling their UK homes and, as a result, may have rented them out for a number of years until a suitable buyer was found.  The main question they asked was “Do I have an Irish and a UK Capital Gains Tax liability?”

Up until 5^th April 2015 the UK domestic law did not impose a Capital Gains Tax liability on non residents which meant if you were Irish resident, for example, then you had no exposure to UK CGT on the sale or disposal of a UK asset.  Because the UK domestic tax law didn’t and couldn’t impose a charge to UK CGT on the disposal of the asset by a non-resident then the Double Taxation Treaty didn’t need to be consulted but the individual would have a CGT liability in their place of residence.  Under Section 29(2) Taxes Consolidated Acts 1997, an Irish resident individual only paid Capital Gains Tax in Ireland.

From 5^th April 2015 the UK Government amended the taxation of gains made by non-residents disposing of UK residential property.

The New UK Rules

The new CGT charge on non-residents deals with “property used or suitable for use as a dwelling” and will include residential property used for letting purposes.

There are, of course, exclusions for certain types of property in communal use which include boarding schools, nursing homes and certain types of student accommodation.

What differentiates this new charge from the existing ATED-related CGT charge is that all residential property falling within the definition comes within the scope of this new legislation regardless of the value of the property.

The existing ATED-related CGT charge limited the charge to properties where the consideration on sale/disposal exceeded a specified “threshold amount” which for all gains arising on or after 6^th April 2015 is £1m.

So, who will be affected by this new charge?

The charge will apply to gains made by

• Individuals

• Trustees

• Closely held non-resident companies

• Funds – to the extent that these gains are not within the ATED-related CGT charge

Who will not be affected by this new charge?

Companies and funds which are not closely-held as well as the majority of institutional investors.

Tax rates (UK)

The tax rates for the new CGT charge on non-residents are the same for UK residents who pay CGT at their marginal rate of Income Tax.

What does that mean?

For taxpayers paying at a Basic Rate, the rate will be 18%

For taxpayers liable at the higher/additional rate, it will be 28%.

For non-residents, the rate will depend on their total UK Income and Gains.

Is there an Annual Exemption?

The annual exempt amount for gains of £11,000 is also be available to non-residents.

Paying and Filing (UK)

In circumstances where the non resident person has an “existing relationship” with HMRC and providing the disposal is not exempt, they will be required to file a self-assessment Tax Return following the end of the tax year and make the relevant payment within the usual deadline dates.

A person who does not have an “existing relationship” must submit a Tax Return and make the appropriate tax payment within thirty days.

What about Tax Returns requiring Amendments?

Amendments or changes to these Tax Returns are allowable within the twelve months following the normal filing date for the tax year in which the disposal is made.

In Summary

• For non-residents disposing of UK residential property, Capital Gains Tax was not an issue up until 6th April 2015.

• With the introduction of the new legislation, which takes from 6th April 2015, non resident individuals, trustees and/or closely held companies or funds may be exposed to a UK CGT Charge.

• Non-resident individuals, trustees or closely-held entities can avoid a CGT charge on a disposal of UK residential property where the property qualifies for Principal Private Residence Relief.

• The new legislation governing Principal Private Residence Relief has prevented some non-residents from claiming the CGT relief.

• Under this new rule, a residence will not qualify for PPR for a tax year unless (a) the person making the disposal is tax resident in the country where the property is located for that tax year or (b) the person spent at least 90 days in that property in that tax year.

• Non-residents can defer the payment of the CGT due until the self-assessment filing date provided they register with HMRC.

For further information, please click: https://www.gov.uk/guidance/capital-gains-tax-for-non-residents-calculating-taxable-gain-or-loss

If you have returned from the UK and you are looking for accurate and up-to-date UK Tax advice or you are seeking UK Tax Consultants with specific HMRC experience, please contact us at queries@accountsadvicecentre.ie

Please be aware that the information contained in this article is of a general nature.  It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.