Starmer steps down: what a change at the top could mean for your money abroad

Sir Keir Starmer announced his resignation as prime minister on Monday, less than two years after a landslide election victory. He will stay in post until his party selects a new leader, with a successor expected to be in place by the time Parliament returns in September. Nominations open on 9 July.

For UK expats, a new prime minister is more than just a political headline. It can influence tax policy, affect how international investors view the UK, and impact your confidence in long-term plans involving UK assets. Here is a balanced look at what this change could mean and, just as importantly, what it does not yet mean.

A seventh prime minister in a decade

Whoever becomes the next prime minister will be the seventh in about ten years. This frequent change is the real story. Both investors and households value stability and a clear economic plan, but years of shifting leadership have made these harder to rely on.

The market’s reaction to Starmer stepping down was revealing. Even though a prime minister's departure is dramatic, government bond yields rose only slightly, and the overall response was calm. Analysts say this shows relief at how smoothly the transition is happening, rather than a judgment about the next leader.

In short, markets responded to the removal of one uncertainty and are now waiting to see what happens next, particularly who becomes chancellor and what direction they set.

The policy direction worth watching

Andy Burnham is the leading candidate to take over, but he has not yet shared a detailed plan, so it is too early to treat any of the following as official policy. However, his past comments suggest a clear theme: moving the focus from taxing income from work to taxing wealth, property, and assets. For UK expats, three areas are especially important.

UK property

Burnham has repeatedly backed reform of council tax and stamp duty, including the idea of a land value or proportional property tax based on current values rather than 1991 valuations. Notably, some of the proposals he has supported would apply a higher rate to second homes, empty properties and overseas owners. Expats who retain UK property — whether a let or a future home — have good reason to follow this debate closely.

Capital gains

He has shown he is open to reviewing Capital Gains Tax and possibly aligning it more closely with Income Tax rates. If this happens, it could change the best way to structure and hold UK assets and property.

Inheritance and estates

Burnham has also suggested replacing Inheritance Tax with a "care levy" on estates to help pay for social care. For expats, whose estate planning often involves more than one country, even early hints like this are worth considering in long-term plans.

At the same time, he is expected to honour existing manifesto commitments — holding Income Tax, VAT and employee national insurance steady — and has sought to reassure markets that he would work within the current fiscal rules. So, while main tax rates may stay the same, there could be changes in other areas.

What this means for you — and what it does not

It is easy to see political changes as a reason to act fast. Usually, the opposite is true. None of the ideas above is legislation. There is no new chancellor, no budget, and no confirmed prime minister. Markets are waiting to see what happens, and most long-term plans should do the same.

At a time like this, it is wise to review your situation. If you own UK property from abroad or have an estate plan that involves more than one country, it helps to know where you could be affected by future tax changes. That way, if things become clearer, you can respond calmly rather than react under pressure. The pound can also be a bit volatile during a leadership change, so keep that in mind if you have a large sterling transfer coming up.

Political cycles change over time, but a good financial plan is designed to handle them. If you want to discuss how a change in government could affect your situation as a UK expat, our advisers are ready to help.