Budget 2025: Quiet Shifts, Lasting Implications

The 2025 Budget may not have been as disastrous as some had feared but the message was clear: the burden of funding the future will be borne across more income streams, over a longer horizon, and often in ways that are subtle rather than explicit.

In total, the measures are forecast to raise £26 billion per year by the end of the decade. For high-net-worth individuals, business owners, legacy families and investors, the direction of travel is clear, the complexity of managing wealth is growing, and careful structuring has never been more important. Below we outline the key measures and why they matter.

Income Tax Threshold Freeze (from 2028 to 2031)

While the thresholds for personal tax and employer National Insurance remain unchanged, inflation ensures they are anything but neutral. This “stealth tax” brings more people into higher bands and increases effective tax rates without altering legislation. It is expected to raise £8 billion, a significant drag on real after-tax incomes over time.

Property, Savings and Dividends: Rates Rise by 2%

Income derived from property, dividends and savings will be taxed more heavily. This increase means additional rates on savings and property income up to 47% from April 2027 and a 2% increase from April 2026 in ordinary and upper rates of tax for dividends. There is no change to the additional rate of tax for dividends. It quietly but significantly erodes net returns and makes direct personal ownership of income-generating assets less compelling.

Implication: Investment holding structures such as Family Investment Companies (FICs) become more attractive as long term investment holding vehicles. A FIC continues to pay 25% Corporation Tax on most income and 0% on most forms of dividends received, presenting a substantial arbitrage over personal rates.

Held within a FIC:

• 25% Corporation Tax on property and savings income
• 0% Corporation Tax on most dividend income

Held personally:

• Up to 47% on property and savings income
• Up to 39.35% on dividend income

Wider asset holding strategies such as offshore insurance wrappers may also warrant review. These offer tax-efficient deferral of income and gains, and allow annual withdrawals of up to 5% on a tax-deferred basis.

Pension Reform: Salary Sacrifice Capped at £2,000

A surprising development is the proposed cap on salary-sacrifice pension contributions, expected to take effect from April 2029. Though the delay makes it speculative in the short term, the message is clear: long-favoured pension planning strategies are under review and may be curtailed.

We continue to believe in the value of proactive pension structuring, but our approach is dynamic, built to evolve with policy rather than resist it. Carefully considered pension contributions still remain an important part of retirement planning.

‘Mansion Tax’: A Council Tax Surcharge in All But Name

From 2028, a new annual charge will apply to higher-value homes. £2,500 for properties worth over £2 million rising up to £7,500 for properties worth over £5 million.

Although modest compared to international wealth tax regimes, it marks the beginning of what may become a more expansive view of residential property as a source of recurring tax revenue.

Capital Gains Tax, Investor Visas, and Missed Opportunities

There were some welcome omissions. Capital Gains Tax rates remain broadly unchanged, and no exit tax has been introduced. Equally, however, a petition from a group of UK lawmakers calling for a modern investor visa designed to attract and retain capital was not acknowledged. For internationally mobile families, this was a missed opportunity to create incentives aligned with long-term investment in the UK. Albeit curiosity has been piqued by reference buried deep in the red book itself that the government will seek views to inform the design of a potentially enhanced ‘tax offer’ for high-talent new arrivals.

The increase in the availability of tax favourable EMI share scheme to larger businesses and expansion of EIS & VCT company investment limit to £10m from April 2026 feel more muted attempts at stimulating growth and there was a disappointing lack of any significant paring back of the proposed IHT reforms, particularly for family businesses due to take effect from April 2026, too. A introduction of a cap on IHT charges of excluded property trusts being welcome but not substantial enough to reverse the damage of the reforms.

A New Framework for Structuring Wealth

This Budget reinforces a long-standing truth: successful wealth management cannot be static. It must respond, adapt and anticipate.

At Hundle, our clients come to us because they want more than reactive financial advice. They want coherence. They want to integrate their holdings, their aspirations, and their values into one elegant, enduring structure.

We deliver that through:

• Multi-asset portfolio strategies that reflect liquidity needs, long-term planning, and global exposure
• Bespoke structuring using FICs, trusts, wrappers and investment vehicles that respond to taxation, regulation and family objectives
• Cross-disciplinary thinking, working in concert with legal, tax and fiduciary advisers
• An ongoing personal relationship with partners who understand the emotional and generational dimensions of wealth

Clarity in Complexity. Confidence in Uncertainty.

For our clients, wealth is more than capital. It is memory, responsibility and future intent. It must be preserved and it must also be put to work, whether through enterprise, philanthropy or intergenerational planning.

The 2025 Budget has reaffirmed what we already know. Wealth requires stewardship. Structures matter. Timing matters. And now, more than ever, so does having a partner who understands how to navigate complexity with clarity, and how to honour legacy with composure.

If you are reviewing your structure, reassessing your objectives, or seeking a second opinion, we are here to support you, with perspective, with precision, and with purpose.