From Salary Sacrifice to Inheritance Tax – Identifying Your Immediate Actions
Rachel Reeves has stepped away from the dispatch box, and the pundits have had their say. But what does the November 2025 Budget mean for your wealth? For our clients – particularly those focused on retirement planning and asset management – the devil, as ever, resides in the detail.
It’s excellent news that the fundamentals of pension relief will remain unchanged. Though the Government is signalling clear shifts elsewhere. VCT tax relief is set to drop from 30% to 20% in April 2026, so we are looking at a limited window of opportunity for investors. And changes to salary sacrifice rules in 2029 may reshape how you approach your personal pension contributions.
This article is an initial overview, designed to highlight key changes and how they could impact you. Over the coming weeks, the team at Harpur Wealth Management will be publishing a series of deep-dive articles to explore these topics in greater detail.
1. Welcome Relief for Pension Savers
If you were holding your breath regarding your pension, you can breathe easy once more. The headlines give absolute clarity – pension income tax relief and your tax-free cash allowances remain exactly as they were. In a budget filled with tax changes, this should be considered a win. This means that your Harpur Wealth retirement plan remains on track, and we can continue to use your full allowances.
2. Now is the Time to Review Your Portfolio
The Chancellor made a significant change with regard Venture Capital Trusts. The reduction in tax rebates from 30% to 20% (effective from April 2026) presents a unique but limited-time opportunity. Our clients may wish to review their VCT position now to make the most of the 30% benefit that’s currently available.
While maximum amount you can place in a cash ISA will be cut in 2027 to £12,000 pa, allowance on Stocks & Shares ISAs remains unchanged at £20,000. Harpur Wealth Management advisors can work with you to ensure you are maximising these tax wrappers without compromising on your short-term cash flow.
3. The Shift in Workplace Contributions
Introduced in the 1970s, salary sacrifice has long been standard for workplace pension contributions. The government’s introduction of employer and employee NICs on salary sacrifices over £2,000 (starting 2029/30), however, reduces the advantage they offer. You may now wish to look at the benefits of your workplace scheme in comparison to the control and choice that a personal pension can offer.
4. Sharing the Load on IHT
The ability to transfer the £1 million Agricultural and Business Property Relief allowance between spouses ensures that unused allowances aren’t wasted – this is an important and welcome shift for our clients with family businesses or substantial land assets.
FAQs – The Details You Might Have Missed
Beyond the headlines, the Chancellor’s red box contained several other measures that may have an impact your finances. Here are answers to three questions we’ve already been asked.
Prepare for slightly higher tax bills. The Chancellor announced a 2% increase on Dividend Tax (starting April 2026) and a 2% rise on savings and rental income tax (starting April 2027). This makes the use of your your tax-free allowances—like your ISA—more important.
It’s still a few years away, but an “Electric Vehicle Excise Duty” will be introduced in April 2028. This is basically a mileage charge for EV drivers. It’s designed to ensure all drivers will contribute to road upkeep as we move away from paying fuel duty on petrol and diesel cars.
Scheduled for April 2028, the surcharge applies only if your property exceeds £2 million (attracting a surcharge of £2,500/year) or £5 million (costing £7,500/year). If you are affected by this, we have time to factor it into your long-term cash flow planning.
Your Financial Future
The November 2025 Budget delivered a mix of ‘business as usual’ and new challenges. It’s reassuring to see the foundations of pension planning remain the same, changes to VCT reliefs, dividend taxes, and future estate planning rules need consideration.
At Harpur Wealth Management, we prize clarity as the foundation to your financial confidence. We are here to ensure your strategy develops in step with the new legislation to secure your long-term goals.
Don’t wait for the new tax year to make changes. Let’s meet soon to discuss how the November 2025 budget announcements could affect your wealth and retirement plans – O1234 924620
Disclaimer
This article is for information only and must not be considered as financial advice. We always recommend that you seek independent financial advice before making any financial decisions.
The value of your investment can go down as well as up and you may get back less than the amount invested.
‘The Financial Conduct Authority does not regulate taxation advice’
