The 2026 UK Budget Digest: What Changed for People Living Abroad, and What Didn't

November 2026

By Will Glyn

After a Budget, one of the questions I hear from clients abroad is whether anything was announced that changes the cost of having left the UK, such as an exit tax on gains people have built up before leaving. John Healey delivered his first Autumn Budget as Chancellor on 28th October 2026, and no general exit tax was announced for individuals leaving the UK.

The same Budget announced a further two percentage points on tax on savings and property income from April 2027. That takes the basic rate to 24% and the top rate to 49%, which is four points above today’s rates of 20%, 40% and 45%, because two points had already been announced in 2025. That reaches individual landlords living outside the UK who are taxed on UK rental income, subject to the Scottish and Welsh governments’ own decisions on property rates. A landlord who owns through a company pays corporation tax instead. The Budget also dropped a proposed extra charge, floated in a consultation, on non-UK resident owners of expensive homes.

For someone living abroad, the Budget matters mainly for what it did to UK rent and savings income, and for the changes people feared that never arrived. It applies whether you are British or another nationality with a UK rental, a UK bank account or a few years of UK residence behind you.

What hits: property and savings income

At the previous Budget in November 2025, then-Chancellor Rachel Reeves announced that from 6th April 2027 property income would be taxed at its own set of rates, 22%, 42% and 47%, instead of the 20%, 40% and 45% it pays now. Mr Healey has now added a further two percentage points on top, so the new rates will be 24%, 44% and 49%.

Take £10,000 of taxable rental profit (rent received minus allowable expenses) that falls in the basic-rate band. That is £2,000 of tax today and £2,400 from April 2027, so an extra £400 for every £10,000 of profit. In the higher-rate band the same profit goes from £4,000 to £4,400. Income tax thresholds are also frozen until April 2031, so rising rents can push more of the profit into the higher band.

The property rates are announced for England, Wales and Northern Ireland, although the Scottish and Welsh governments now have the power to set their own property income rates. The new savings rates apply across the whole of the UK. Scottish property rates have not been announced yet, and the Scottish Budget is on 3rd December 2026. Like most Budget measures, these are announced rather than enacted: the government plans to legislate in the Finance Bill 2026-27, so the 24%, 44% and 49% rates are not yet law.

On who has to pay UK tax on rent, the rule is clear: UK rental income is taxable in the UK whether or not you live there. What changes when you move abroad is how the tax is collected. If you live outside the UK for more than six months of the year, HMRC’s Non-resident Landlord Scheme applies, under which the letting agent (or, where there is no agent and the rent is over £100 a week, the tenant) deducts basic-rate tax from the rent unless HMRC has approved gross payment.

Savings are less clear-cut. In practice, UK bank interest usually attracts no UK tax for non-residents, because the ‘disregarded income’ rules let certain UK income, including bank interest, be left out of a non-resident’s UK tax bill. That is not automatic for everyone. Where UK tax is due on savings interest, it will be charged from April 2027 at 24%, 44% or 49%, depending on whether your total UK taxable income falls in the basic, higher or additional rate band. It is worth confirming your position rather than assuming it.

Why the UK rate is only half the bill

Clients sometimes assume that paying UK tax on a rental closes the matter, but the UK bill does not settle it on its own. You can be taxed on your UK income by HMRC and by the tax authority in the country where you are resident. If you live in Spain, France, Portugal or Cyprus, your local tax office will generally expect that UK rent on your return there as well.

What saves you from paying twice is a double-taxation agreement between the UK and your country, which can give relief. In most cases the relief is a credit, and it is usually capped at what your country would have charged on the same income. Suppose, purely as an illustration, that the UK takes £2,400 on £10,000 of profit and your country would have charged £2,000. Your country would typically let you set the UK tax against its own £2,000 bill, so you owe nothing locally, but no one refunds the other £400, so your total tax is £2,400 instead of £2,000. If your country would have charged £3,500, the £2,400 you paid in the UK comes off that bill and you pay the £1,100 difference locally, so your total is £3,500.

The United Arab Emirates works differently. Living in a zero-tax jurisdiction such as the UAE does not exempt UK rental income from UK tax, and there is no local bill to credit it against, so the UK rate is the whole cost. I am not a tax adviser, and how a treaty gives relief depends on the country and the type of income. For the local side, you will need a tax professional where you live. We work with a number of tax advisers and can introduce you to one if that would help.

What was feared and did not arrive

Before the Budget, an exit tax on unrealised gains when people leave the UK, and a rise in capital gains tax rates, had both been put forward as possibilities. Neither happened.

I would not read the absence of an exit tax or a capital gains tax rise as a permanent all-clear. Neither an exit tax nor a wealth tax was expressly ruled out for the future. Existing rules also still apply when you leave. Non-UK residents must report disposals of UK land and buildings to HMRC within 60 days of completion, even if no tax is payable, and pay any tax due by then.

One technical change sits close to this topic and is easy to misread. The government has announced that, for exit charges arising on or after 28th October 2026, no exit charge will arise where a trust becomes UK resident because a trustee moves to the UK and then ceases to be UK resident in the same or following tax year. Legislation will follow in Finance Bill 2026-27. The stated aim is to make it easier for globally mobile talent to relocate to the UK. It removes a charge in a limited set of trust cases and does not apply to individuals leaving the UK.

The council tax surcharge and the premium that was dropped

The High Value Council Tax Surcharge was announced in 2025 and is unchanged in its main terms. It starts in April 2028 for residential properties in England valued at £2 million or more, with an annual charge of £2,500 to £7,500 on top of existing council tax. A government consultation had floated an additional premium for owners who live outside the UK. The government has abandoned that proposal. It has been replaced by a premium on homes within the surcharge that are substantially unfurnished and unoccupied for 12 months or more.

A short gap between tenants would not normally count, but a home left empty for a year while you are away could be caught once the surcharge starts in April 2028. Liability generally falls on the legal owner, including companies and trustees. An owner of a qualifying rented home could face the surcharge even when a tenant pays the ordinary council tax bill.

Unchanged: pensions and the residence-based inheritance tax rules

Two inheritance tax (IHT) points were not touched by this Budget. The first is the pension change: from 6th April 2027, most unused pension funds and pension death benefits will count as part of your estate for UK inheritance tax. The Budget left the start date and scope unchanged, adding only two technical amendments: one on how the tax is paid and one on charitable giving.

The second is the residence-based regime that replaced domicile in April 2025. You are a long-term resident if you have been UK resident for at least 10 out of the previous 20 tax years. After you leave, a “tail” keeps your worldwide assets inside UK IHT. The tail is three full tax years if you were resident for 10 to 13 years, and rises by one year for each extra year of residence until it reaches ten.

So someone who lived in the UK for 15 years and then moved to Dubai has a five-year tail. The Budget was silent on further changes to inheritance tax, but Farrer says that does not mean those possibilities have been taken off the table.

A short checklist

• If you let out UK property — work out your 2027/28 rental profit at 24%, 44% and 49%. Confirm whether your agent is withholding tax or you have HMRC approval to receive rent gross. Ask your local adviser how your country of residence will credit the UK tax. If the property is in England and worth £2 million or more, check who the legal owner is.
• If you hold UK cash — find out whether your interest is treated as disregarded income. If UK tax is due on it, the new savings rates apply from April 2027. It is also worth asking whether the balance needs to sit in a UK account at all.
• If you used to live in the UK — count your UK residence years against the 10-of-20 test and work out how long your tail runs. Review who is nominated on your pensions before April 2027. If you plan to return within five years, check the temporary non-residence rules: if you were UK resident in at least four of the seven tax years before leaving, certain gains and income realised while you were away can be taxed in the UK on your return.

How We Can Help

At PWA, we work with people living and working abroad on how their UK assets fit with the rest of their financial life. In practice that covers:

• Financial planning — looking at your UK income and assets alongside what you hold and owe where you live.
• Pensions and retirement planning — reviewing existing UK pensions, including SIPPs, and the options open to you ahead of the April 2027 change.
• Existing investments — reviewing what you already hold, including UK-based investments, and whether it still suits your situation.
• International banking and currency exchange — looking at where your cash sits and in which currency.

If you would like to look at how any of this applies to your own position, you can book a call with me.

Will is an Independent Financial Adviser with over a decade of experience helping expats make the most of their international status.