UK Spring Budget 2025: What’s Coming for Personal Taxes?

While increasing economic development is likely to be the main focus of the Spring Budget 2025, personal taxes may also see some changes.Here is a brief summary of the things to watch out for:

  1. Income Tax: Likely to Stay the Same
    • It’s expected that the higher-rate threshold and personal allowance will stay frozen. With rising inflation, more people could be pushed into higher tax bands, effectively increasing tax revenue without raising rates, even though we may not see major changes.
  2. Non-Dom Status: Significant Shifts Are Ahead
    • The government is making progress toward its goal of eliminating non-domiciled status by April 2025. High-net-worth individuals should expect big changes, in particular those who have used non-dom status in the past to reduce their tax bills.
  3. Be Aware of UK Inheritance Tax (IHT)
    • Plans are underway for the pension IHT exemption to be phased out by 2027 and changes to business and agricultural relief are set for 2026. While the Spring Budget may not provide much detail, expect some updates as discussions progress.

While we’re not expecting drastic changes, the Spring Budget will likely shed light on updates that could affect your tax planning, especially around non-doms, inheritance tax, and digital tax.While we’re not expecting drastic changes, the Spring Budget will likely shed light on updates that could affect your tax planning, especially around non-doms, inheritance tax, and digital tax.

For our Australian expats living in the UK, the Australian budget is to be announced on 25th March 2025.

Any prospective changes to the Australian tax system could affect your UK tax preparation, particularly if you are managing cross-border financial interests. Even though the Spring UK Budget will mainly address UK domestic matters, it’s important to keep an eye on both budgets to stay on top of any updates that could affect your tax obligations in both countries.