Key Amendments Announced in the Autumn Budget 2025
In this article, we pull out the key amends announced in the Autumn Statement that you’ll need to be aware of in terms of your CII exams. This article is particularly relevant to exams R01, R02, R03, R04, AF1, AF4, CF6 and R07.
This article is relevant to examinable tax year 2025/26 and is correct as at 2 December 2025.
In the weeks leading up to this year’s Autumn Budget, speculation ran high, with rumours and predictions flooding the media. In the end, there were few headline surprises, but Rachel Reeves delivered a lot of smaller, incremental tweaks. In this blog, we cut through the noise and highlight the key changes candidates will need to know for their future CII exams.
Income Tax
Extended freeze on the Personal Allowance and Income Tax Thresholds – There are no changes to Income Tax allowances for the 2025/26 tax year. The current freeze on the Personal Allowance and the higher-rate thresholds will be extended from 5 April 2028 to 5 April 2031.
One impact of freezing the Personal Allowance is that, from April 2027, the full new State Pension is expected to exceed the £12,570 Personal Allowance which will trigger a tax charge. The government have stated they plan to ‘ease the administrative burden’ on pensioners whose sole income is the basic or new State Pension, so that from 2027/28 they will not have to pay small amounts of tax via Simple Assessment.
Dividend Tax Rate – This is set to increase by 2% for basic-rate taxpayers rising to 10.75% and for higher-rate taxpayers rising to 35.75%. The additional rate will remain unchanged at 39.35%. – From 6 April 2026.
Tax on savings income – This will increase by 2% for all taxpayers, increasing tax rates to 22%, 42% and 47%. – From 6 April 2027.
New tax on property income – Introduction of a new tax rate for income from property. The basic rate will be 22%, the higher rate will be 42% and the additional rate will be 47%. Relief for mortgage interest costs will be provided at the basic rate of 22%. The thresholds at which the rates apply will be the same as those that apply to income tax. – From April 2027.
Venture Capital Trusts (VCTs) – The income tax relief available on VCTs will be reduced from 30% to 20%. – From April 2026.
National Insurance Contributions (NICs)
Extended freeze on thresholds – The NICs threshold for employees, self-employed individuals and employer contributions will be extended at the current levels for a further three years from April 2028 to 5 April 2031.
Overseas voluntary NICs abolished – Voluntary Class 2 NICs to be abolished for individuals living abroad and the initial residency or contributions requirement for voluntary Class 3 NICs will increase to 10 years from 6 April 2026.
Inheritance Tax (IHT)
Extended freeze on Nil Rate Bands (NRBs) – The inheritance NRB of £325,000, the residence NRB of £175,000, and the combined £1 million allowance for the 100% rate of agricultural property relief and business property relief (being introduced from 6 April 2026) will be frozen for an extra year until 5 April 2031.
Business and agricultural reliefs extended between spouses/civil partners – As announced in the Autumn budget 2024, from 6 April 2026, 100% IHT business and 100% IHT agricultural relief will be restricted to the first £1m of combined business and agricultural property. Property in excess of this amount, will be eligible for 50% relief only. The government has extended the relief so that any unused allowance for the 100% rate will be transferable between spouses and civil partners, including if the first death was before 6 April 2026, effectively allowing up to £2m of qualifying assets to be passed free of IHT. – From April 2026.
Here are the highlights of the Autumn 2025 Budget Share on XPensions
Salary Sacrifice – The amount that is exempt from NICs will be capped at £2,000 a year for employee contributions made via salary sacrifice. Contributions above £2,000 will be subject to both employer and employee NICs. – From April 2029.
State Pension – The Triple lock will continue to apply to State Pensions which will increase by 4.8% in April 2026 to £241.30 per week.
Council Tax
High Value Council Tax Surcharge – Owners of property valued at more than £2m will be liable to an extra annual charge on top of their existing Council Tax liability. – From April 2028.
High Value Council Tax Surcharge:
Threshold (£m) | Rate (£m) |
|---|---|
£2.0 - £2.5 | £2,500 |
£2.5 - £3.5 | £3,500 |
£3.5 - £5.0 | £5,000 |
£5.0+ | £7,500 |
ISAs
£12,000 cap on Cash ISAs – The £20,000 overall ISA annual limit remains however for those under the age of 65 there is a £12,000 limit within this for Cash ISAs. Those aged over 65 will still be able to save up to £20,000 into Cash ISAs. – From April 2027.
Lifetime ISAs – There were no immediate changes to the Lifetime ISA (LISA) announced but the government will undertake a consultation and the Chancellor does plan to introduce a new scheme for first-time home buyers.
Other notable announcements
- Two-child benefit cap – lifted from April 2026
- Help to Save scheme to be permanent – Those eligible will receive a bonus of 50p for every £1 they save over 4 years, a potential bonus of £1,200.
- Making Tax Digital for Income Tax – This is the HMRC system, now being introduced from April 2026 for some sole traders and landlords to report their income and expenses to HMRC. The Chancellor confirmed in the budget there will be no late submission penalties for quarterly updates during the 2026/27 tax year for those taxpayers required to join Making Tax Digital.
- Low value imports into the UK – The £135 or less relief to be abolished. – From March 2029
- Student loan repayment threshold frozen at the 2026/27 level for three years.
- Tax relief for non-reimbursed homeworking expenses will be removed. Many homeworkers currently claim tax relief of up to £6 per week to cover costs such as heating, electricity, broadband, or office supplies. This will be abolished from 6 April 2026
- The 100% first-year allowances for zero-emission cars and electric vehicle charge-points are being extended until 31 March 2027 for corporation tax and 5 April 2027 for income tax purposes.
- UK Listing Relief – From 27 November there will be a Stamp Duty Reserve Tax exemption for newly listed UK stocks for three years.
When will I be tested on the new rules?
The CII states:
“Candidates will be examined on the basis of law and practice in England unless otherwise stated. The general rule is that the new tax year and changes arising from the Finance Act will be examined from 1 September each year. Other changes, not related to the Finance Act, will not be examined earlier than 3 months after they come into effect.”
