How the Autumn Budget impacts people with substantial assets
If you have significant wealth tied up in property, investments or a business, Budget week tends to bring a familiar mix of anticipation and concern. You want to know what’s changing, what it means for you and your family, and whether there’s anything you should be doing differently.
Budget 2025:What it means for you
... as a wealthy individual
with Duncan Horner
This year’s Budget includes several measures that will affect people who rely on investment income, who own higher-value homes, or who are thinking about selling a business in the next few years.
While the headlines focused mainly on cost-of-living support and public spending, the detail paints a clearer picture: tax on wealth is rising, and more people with substantial assets will feel the effects over time.
To help make sense of the changes, we asked Duncan Horner, Chartered Financial Planner at Amber River Premier in Marlow, to highlight the changes he believes will matter most to the clients he’s been supporting for more than 25 years.
"Next year you’ll see higher tax rates on dividend income, and from April 2027, the income from savings and property will also be taxed at higher rates.”
1. Higher tax on investment income
For many families with significant wealth, investment income isn’t just a nice-to-have. It’s part of the long-term plan: a way to diversify income in later life, reduce reliance on salary, and create options.
That’s why the increase in tax on dividends, savings income and rental income is such a significant shift.
As Duncan explains: “From April 2026, you’ll see higher tax rates on dividend income. And from 2027, the income you receive from savings and property will also be taxed at higher rates.”
If you’ve spent years building up a portfolio, or if much of your wealth sits in property, this is likely to feel like yet another squeeze.
And while the change to investment income tax is important on its own, Duncan highlights that it doesn’t sit in isolation: “When you combine those increases with the fact that income tax thresholds remain frozen until 2031, it will affect the overall amount of tax you end up paying, and inevitably reduce the net returns you receive from your savings and investments.”
In other words, rising tax rates are one part of the picture; the broader environment is also shifting around you.
So what can you do?
Duncan’s first recommendation is to pause and review where your income is coming from: “The first thing I’d encourage you to do is review your existing portfolios. Make sure your high-yielding assets are sheltered wherever possible.”
Depending on your situation, that might mean:
- Making full use of ISA and pension allowances
- Holding certain assets in the name of a lower-earning partner
- Rebalancing your portfolio so high-yield assets sit in tax-efficient wrappers
- Looking again at trusts or other structures that may make sense for you
And if you’re still earning: “Pension contributions remain one of the most effective ways for you to mitigate tax and avoid those tax traps.”
2. The slow creep of fiscal drag
Duncan has already touched on how frozen tax thresholds contribute to rising tax bills over time, but it’s worth exploring this separately, because it’s one of the most underestimated parts of the Budget.
Fiscal drag works quietly. You don’t see an announcement or a headline. But year by year, as thresholds stay still, and your income grows or even just stays steady with inflation, more of that income slips into higher tax bands.
If you rely on dividends, rental yields or interest for part of your income, the effect is even more pronounced. You may not change anything about the way you invest or draw income, yet still find your tax bill rising.
What can help?
- Being thoughtful about the timing and structure of income
- Making sure both partners’ allowances are fully used
- Reviewing company or partnership structures to ensure they’re still tax efficient
- Exploring whether taking capital rather than income might reduce drag
For many families, these small adjustments can make a surprisingly big difference over a decade.
Other Budget changes that may affect people with substantial wealth
Beyond Duncan’s top two concerns, several other measures will affect how you hold property, invest cash and plan for the future.
3. A new surcharge for high-value properties
If your home, or second home, is worth over £2 million, you’ll face a new annual charge of £2,500–£7,500.
What this might mean for you
For some, it’s an extra cost to absorb. For others, it may prompt a conversation about whether a large property still fits their long-term plans, especially if they’re thinking about downsizing, gifting property, or passing assets to children.
4. ISA changes for under-65s (from 2027)
If you’re under 65, you’ll only be able to hold £12,000 of your ISA allowance in cash from 2027.
For people who like to keep meaningful liquidity inside a tax-free wrapper, that’s limiting, and may require rethinking where you keep your cash reserves.
What you can do
This is a good moment to review your broader cash strategy, because the right amount of cash to hold is different for everyone. Speaking with a financial planner can help you understand:
- How much cash you genuinely need, both for an emergency fund and for any short-term capital spending you’re planning.
- Your time horizon for anything beyond that, and whether surplus cash may be better placed in a Stocks & Shares ISA or pension aligned with your risk profile.
- Whether other low-risk options, such as money market funds, gilts or even Premium Bonds, might help maintain liquidity without relying solely on ISAs.
5. Business owners: reduced relief for EOT sales
If you’d been considering selling your business to an Employee Ownership Trust, the reduction in relief to 50% means it may now be less attractive.
Why this matters
This route has been popular precisely because it offers founders a smoother, values-aligned exit. For many, it also felt like the “fair” option. With reduced relief, it’s worth looking afresh at:
- The timing of your exit
- Whether an EOT still makes sense
- Alternative options like a trade sale or management buyout
"A threshold freeze. A property surcharge. A reduction in relief. On their own, each is manageable - but together they shape how people with substantial assets plan their futures."
6. Lower tax relief on VCTs
For investors who’ve already maxed out pensions and ISAs, Venture Capital Trusts have been a valuable tool, not just for returns, but for cutting Income Tax.
Reducing relief from 30% to 20% makes that benefit smaller.
And because VCTs invest in early-stage or smaller companies, they naturally carry a higher level of risk more than conventional investments.
If VCTs form a meaningful part of your strategy, it’s worth checking whether they still do what you need them to, and whether the level of risk remains appropriate for you.
7. Rising EV-related costs
Higher-income households represent 41% of EV owners. With the introduction of per-mile charging, the running costs of electric vehicles are likely to rise, particularly for families with multiple EVs or high mileage.
This isn’t a dramatic change, but it’s one to factor into long-term planning.
So what does all this mean for you?
The most important thing to remember is that none of these changes exists in isolation.
One tweak to investment income. A threshold freeze. A property surcharge. A reduction in relief. On their own, each is manageable. But together, they shape the environment in which people with substantial wealth are planning their futures.
And that’s exactly why reviewing your position now, rather than later, can make such a difference.
As Duncan summarises: “There are other ways, of course, and we would suggest that you speak with your adviser.”
If you want clarity on how the Budget affects your wealth, your long-term plans or your family’s financial security, Amber River’s financial planners are here to help you navigate the changes calmly and confidently.
Want clear guidance on what the Autumn Budget means for you?
Visit our Budget Hub for expert insights, predictions and analysis to help you understand how potential changes could affect your financial plans.
Or speak directly with an Amber River adviser for personalised guidance.
