Autumn Budget 2026: What British Expats Should Be Watching

Chancellor John Healey will announce the Autumn Budget on Wednesday, 28 October. As always, plenty of speculation surrounds what it will include.

Most of the coverage is aimed at people living in the UK. If you have financial ties in more than one country, some changes will affect you much more than someone living only in the UK, while others may not impact you at all.

Here's what to watch in this Budget through an expat lens: what's already decided, what could still change, and why planning ahead is better than reacting at the last minute.

First: how to read Budget speculation

A quick warning before we get into details. In the weeks leading up to any Budget, stories about what "the Chancellor is considering…" often appear, but most of them never happen. This year is no different.

For example, this summer, many reports suggested replacing stamp duty and council tax with a yearly property or land value tax. By late August, reports said this change would not happen. In the last two weeks, the Chancellor also dismissed two major rumours: no increase in capital gains tax and no lowering of the "mansion tax" threshold.

Acting on rumours, like rushing a sale, restructuring, or moving money to avoid a possible change, can lead to costly and permanent mistakes. Nothing in this article is a prediction. It’s a guide to what’s being discussed and what it could mean for you.

What's already law (and matters more than the rumours)

This is something many expats overlook. Several important changes are already set in law for April 2027, no matter what the Chancellor announces on the 28th:

• Unused pension funds: Will be included in inheritance tax starting from 6 April 2027. For expats with UK pensions, this is the biggest change in years. A pension pot that would have gone to children without inheritance tax could now face a 40% charge, possibly along with income tax for the person who inherits it.

• The cash ISA limit falls to £12,000 for under-65s: From 6 April 2027, with the overall £20,000 ISA allowance unchanged.

• Savings and property income tax: Rates will rise by 2 percentage points from April 2027. This means rental profits will be taxed at 22%, 42%, and 47%. These changes will directly affect expat landlords who own UK property.

• Income tax thresholds: Remain frozen to April 2031, so fiscal drag continues for four more tax years.

• The High Value Council Tax Surcharge: A "mansion tax" takes effect from April 2028.

If you own UK property or have a UK pension, these changes are already confirmed. They matter more than any rumours.

What's ruled out

The Government has said it will honour its manifesto commitment not to raise the headline rates of income tax, VAT or employee National Insurance.

Those three taxes make up most of the government’s tax receipts. That’s why attention has shifted elsewhere, and why frozen thresholds matter so much. Freezing thresholds raises your tax bill without changing any rates.

Two further rumours have been knocked down in the past fortnight.

A capital gains tax rise

The Chancellor has rejected calls, including from within the Cabinet, to raise Capital Gains Tax (CGT). This decision reportedly followed warnings that it could reduce revenue if wealthy individuals left the country or delayed selling. The rate remains at 24% on residential property gains for higher-rate taxpayers. One note: a significant rise, especially one that aligns CGT with income tax rates, has been ruled out. Commentators say a smaller adjustment is still possible.

Lowering the "mansion tax" threshold

The High Value Council Tax Surcharge was set to apply from April 2028 to homes worth £2 million or more. Speculation suggested the threshold would drop to £1.5 million, which research indicated would have roughly doubled the number of affected properties. After opposition from Labour MPs, the Chancellor has ruled this out. The £2 million threshold remains.

Why this matters to expats: If you own UK residential property, both of these changes would have affected you, with no allowance for living abroad. Both are now off the table for the 28th. This doesn't mean property is unaffected, as other measures haven't been ruled out, but the two biggest threats to expat landlords and second-home owners have faded.

What's genuinely in play (and why it matters abroad)

With an estimated headroom of about £5–10 billion, down from £22 billion at Budget 2025, the Chancellor has less flexibility than last year. Here are the main topics being discussed and what they mean for expats.

Property, beyond the mansion tax

With both CGT and the threshold cut ruled out, there is less talk about property than before, but it’s not completely quiet. The planned rise in property income tax rates is still coming in April 2027.

Why it matters to you: Expat landlords have to deal with the Non-Resident Landlord Scheme, non-resident CGT with a 60-day reporting deadline, and UK inheritance tax on UK property, no matter where they live. The rates may not change, but the risks remain.

→ Funding a UK property from abroad

The pension tax-free lump sum

This is a common rumour: some previews suggest the tax-free lump sum could drop from £268,275 to as low as £100,000 this year. No one has announced anything, and this rumour comes up before every Budget but has never happened.

Why it matters to you: If you have UK pensions and plan to take money from them while living abroad, the tax-free part is an important factor to consider.

→ QROPS vs SIPP vs leaving it in the UK

Inheritance Tax Thresholds

The nil-rate band has stayed at £325,000 since 2009 and will be frozen until 2031. There is talk of further changes and reform.

Why it matters to you: Since April 2025, UK inheritance tax is based on where you live, not your domicile. If you are a long-term resident, it includes your worldwide estate, even for a while after you leave. UK property is always included.

→ UK inheritance tax for expats

The State Pension and the personal allowance

This is an important point that hasn’t had much attention. The government published September’s inflation figure on 21 October, and with May-to-July earnings growth at 3.9%, the April 2027 increase is basically set.

A 3.9% rise would take the full new State Pension above £13,000 — higher than the £12,570 personal allowance for the first time. The Pensions Minister has confirmed that pensioners whose only income is the State Pension will be exempt from paying tax on it, and the Chancellor is expected to set out how that will work.

Why it matters to you: If you have retired to a country where your State Pension is frozen, none of these changes will affect you. Your pension will not increase at all.

→ The frozen State Pension trap · State Pension 2027

What to do before the 28th

Two things are worth doing before the 28th.

Use what's already available

This year’s £20,000 ISA allowance and your CGT annual exempt amount are available now. Since CGT rates are confirmed as unchanged, there’s no reason to rush a sale based on rumours. If you’re a UK resident, using these allowances doesn’t depend on the Budget. If you’re non-resident, you can’t contribute to an ISA, which is important to know.

→ Your ISA and moving abroad

Know where you're exposed

Figure out which of your assets are subject to UK tax, such as UK property, UK pensions, and your estate under the residence-based rules. This way, when new measures are announced, you can respond quickly and calmly instead of starting from scratch.

It’s not worth changing your financial plans based on a rumour. Only measures announced that day and confirmed in detail afterwards matter.

After the Budget

We’ll publish a full breakdown of what the Budget really means for British expats once the Chancellor has spoken. We’ll focus on what matters most for people living abroad. Until then, the best approach is to be patient.

If you want to review your UK tax exposure before the Budget, so you can act on facts instead of rumours, get in touch with Holborn Assets.