Michael Wistow and Fionnuala Lynch share their insights on November’s UK budget announcement
Following yesterday’s budget announcement, our Global Head of Tax, Michael Wistow shares his comments:
“Whilst personally annoyed by another tax and spend budget which will raise significant amounts of tax by fiscal drag from frozen allowances / bands etc there isn’t much affecting business in here, apart from capital allowances where a higher first year allowance is offset by reduced WDAs later.
The 2 % IT increase for individuals on rent, savings and dividends is a direct attack on middle England allegedly to have equivalence with employee NICs. Bizarre as ostensibly such NICs are supposed to be to fund future pensions. In reality NICs are just another form of IT and this reinforces that view.
The mansion tax / high value council tax surcharge commencing in 2028 will only raise £400m but will require all houses to be valued as the current system is rebased. It will doubtless be the thin end of the wedge.”
Our Head of UK Tax, Fionnuala Lynch, had the following to say:
On capital gains tax and employee ownership trusts: “Historically sales of controlling shareholdings in trading companies to employee ownership trusts or EOTs occur on a no gain no loss basis for CGT. From 26th November, only 50% of any gain will fall within the favourable no gain no loss rules and with the remaining 50% being taxed under normal CGT rules.”
On stamp duty on newly listed company shares: “Yesterday, the Chancellor announced the abolition of stamp taxes on transfers of shares in UK incorporated companies which are newly listed in the UK for a three- year post list period.”
On EMI schemes: “Until now, companies that had more than 250 employees and/or gross assets of over £30m were unable to benefit from EMI reliefs. With effect from 6 April 2026, these limits will be increased to 500 employees and £120 million respectively.”
On EIS and VCT arrangements: “EIS and VCT arrangements deliver income and capital gains tax breaks for their investors. The arrangements are to be amended to be less focused on early- stage companies. In particular, the investment thresholds for investee companies are to be stretched. From April 2026 the annual company investment limit will increase from £5m to £10m, the lifetime limit will increase from £12m to £24m and the gross assets test will increase from £15m to £30m before the share issue and from £16m to £35m after the share issue.”
DATE 27/11/2025
