Written 29 October 2026, the day after the Budget, from the Budget document, the HMRC policy papers published with it and the overview of tax legislation and rates. Sources are listed at the end. Several measures still need legislation; each one says so.
The Chancellor presented Budget 2026 to Parliament on Wednesday 28 October 2026.[1] For people moving between the UK and the UAE, three measures matter most: higher income tax on UK rent and savings from 6 April 2027, a higher weekly rate for voluntary Class 3 National Insurance, and the cash ISA allowance staying at £20,000. Headline rates of income tax, National Insurance and VAT did not rise.[2]
This guide covers what was announced, from when, and who it affects. It is planning information, not tax advice. The UK Tax Guide and the Pensions guide explain the rules these changes sit on.
The headline picture
Tax on UK rent from April 2027
24% / 44% / 49%
New property income rates in England, Wales and Northern Ireland
Tax on savings interest from April 2027
24% / 44% / 49%
Savings rates, across the UK
Voluntary Class 3 NI, 2027/28
£19.05 a week
Up from £18.40 in 2026/27; set by regulations in early 2027
Cash ISA allowance
Stays £20,000
The planned cut is reversed; regulations due November 2026
Pensions and inheritance tax
From 6 April 2027
Most unused pension funds count in the estate, as already legislated
Headline rates
No rise
Income tax, National Insurance and VAT
If you are planning to leave
Selling a business before you go. The lifetime limit on gains that qualify for Business Asset Disposal Relief falls from £1 million to £500,000 from 6 April 2027.[2] Transitional rules cover contracts signed before that date and completed after it.[3] If a sale is close, ask a UK tax adviser which side of the date it falls.
Withdrawing from a Lifetime ISA. If you take money out of a Lifetime ISA to buy a first home above the Lifetime ISA property price cap, the withdrawal charge falls from 25% to 20% for withdrawals on or after 29 October 2026. You keep your own payments and lose only the government bonus. The 25% charge still applies to other withdrawals that do not meet the rules.[6]
Keeping a UK home to let. Rent from a UK home stays taxable in the UK after you leave.[10] From 6 April 2027 that rent is taxed at new property income rates: 24% basic, 44% higher and 49% additional, in England, Wales and Northern Ireland. Scotland and Wales can set their own property rates.[3] [4] Budget 2025 had already announced a rise of two percentage points; this Budget adds a further two.[2] If you are deciding whether to sell or let, run the rent through these rates rather than the 2026/27 ones.
Your ISA. You can keep an ISA and its UK tax relief after you leave, but you cannot pay in while you are non-resident.[11] The cash ISA limit stays at £20,000 for savers aged 18 and over from April 2027, reversing the planned cut.[2] The regulations are due before Parliament in November 2026.[3]
If you live in the UAE now
Letting your UK home. The new property rates above apply from 6 April 2027. Non-resident landlord rules are unchanged: your letting agent, or your tenant if you have no agent and the rent is over £100 a week, deducts basic rate tax unless HMRC approves you to receive the rent in full and pay through Self Assessment.[10] The overview of tax legislation lists no change to the non-resident landlord scheme.[3]
UK savings outside an ISA. The savings rates rise to 24% basic, 44% higher and 49% additional from 6 April 2027, across the UK.[3] [4] The Personal Savings Allowance and the starting rate for savings continue.[2] How much UK tax a non-resident pays on UK interest follows separate rules; check them with an adviser before you assume the new rates apply to you.
Voluntary National Insurance. The weekly Class 3 rate is set to rise from £18.40 in 2026/27 to £19.05 in 2027/28, by regulations in early 2027.[3] [12] Class 2 is no longer open for time abroad, and Class 3 for time abroad needs 10 years of UK residence in a row or 10 qualifying years.[12] The Pensions guide shows what an extra qualifying year adds.
A UK home worth £2 million or more. A High Value Council Tax Surcharge applies from April 2028 to owners of residential property in England worth £2 million or more, collected by councils with Council Tax. The policy paper also describes a 100% premium on properties left empty and unoccupied for 12 months or more. The charges and exemptions have not been published.[9]
Selling UK residential property. If you miss the deadline for a UK property disposal return but report the disposal on your Self Assessment return and pay the tax, late filing penalties for the missed return stop. This applies from 28 October 2026.[5] It does not remove the need to file the disposal return on time.
Pension death benefits. From 28 October 2026, a lump sum death benefit that would be paid free of tax no longer becomes taxable only because it is paid more than two years after the scheme learned of the death. The same rule is removed for money put into drawdown in pension schemes outside the UK after a death.[7] [3]
Serious ill-health lump sums. Medical evidence for a serious ill-health lump sum will be accepted from a practitioner outside the UK if you live in the same country as the practitioner, or the pension scheme is established there.[8] The change takes effect when the Finance Bill receives Royal Assent.[3]
If you are coming back
Tax on rent and savings. Once you are UK resident again, the 24%, 44% and 49% savings rates apply to interest outside an ISA from 6 April 2027, and the same property rates apply to rent in England, Wales and Northern Ireland.[3]
Paying into an ISA again. You can pay in again once you are UK resident.[11] The cash ISA limit stays at £20,000 from April 2027.[2]
Buying a first home. A First Time Buyer ISA is announced to replace the Lifetime ISA for new savers from April 2029: a 25% government bonus on the final balance, up to £20,000 of bonus, paid on withdrawal towards a first home worth up to £450,000. Legislation is still to be introduced. Existing Lifetime ISA holders can carry on under the current rules.[3]
State Pension. The Budget announced an adjusted Triple Lock from the next Parliament, after which the State Pension will track earnings over time. The Budget document gives no formula yet.[2] Separately, from 6 April 2027 a new Pension Tax Allowance means pensioners whose total income is up to the full new State Pension will not pay small amounts of income tax through Simple Assessment, for 2027/28 to 2029/30.[3]
What did not change
- Headline rates. No increase to the headline rates of income tax, National Insurance or VAT.[2]
- Income tax on earnings. Rates on earnings are unchanged; only savings and property rates rise.[2]
- Most National Insurance thresholds. Apart from the Lower Earnings Limit and the Small Profits Threshold, National Insurance limits and thresholds stay at 2026/27 levels until 2030/31.[3]
- Pensions and inheritance tax. From 6 April 2027 most unused pension funds and death benefits come into the value of an estate for inheritance tax, as legislated in Finance Act 2026. The Budget adds minor amendments, including letting personal representatives direct the scheme to pay the inheritance tax in some cases.[3]
- Residence rules. The overview of tax legislation and rates lists no change to the Statutory Residence Test.[3]
Next steps
- Recheck a sell or let decision with the April 2027 property rates. The UK Tax Guide covers non-resident landlords and Capital Gains Tax on UK property.
- Check your National Insurance record and the 10-year test before paying Class 3. The Pensions guide has the steps.
- For a business sale or a large pension, ask a UK tax adviser for a written quote before April 2027.
Sources
Checked 29 October 2026. Every page below was published on 28 October 2026 unless it says otherwise.
- Budget 2026 (GOV.UK, HM Treasury): Budget presented to Parliament on Wednesday 28 October 2026.
- Budget 2026 document (HM Treasury), read in the PDF version: no rise in headline rates (paragraph 2.29); savings and property rates up a further two percentage points from April 2027, earnings rates unchanged (2.50); Personal Savings Allowance and starting rate continue (2.51); cash ISA limit stays £20,000 (2.52); Business Asset Disposal Relief limit £500,000 from April 2027 (2.53); adjusted Triple Lock from the next Parliament (executive summary, 1.28 and 1.29).
- Budget 2026: overview of tax legislation and rates (HMRC and HM Treasury): savings rates (1.1), property rates (1.2), Pension Tax Allowance (1.4), serious ill-health lump sums (1.16), pensions and inheritance tax (1.27), Business Asset Disposal Relief (1.33), National Insurance for 2027/28 including Class 3 at £19.05 a week (2.1), First Time Buyer ISA (2.3), cash ISA limit (2.5). No section on the Statutory Residence Test or the non-resident landlord scheme.
- Changes to savings and property rates of Income Tax (HMRC policy paper): new rates from 6 April 2027, following the Budget 2025 announcement.
- Capital Gains Tax: late filing penalties for returns for disposals of UK residential property (HMRC policy paper): penalties stop once the disposal is reported and paid through Self Assessment, from 28 October 2026.
- Reduce Lifetime ISA withdrawal charge for properties over the property price cap (HMRC policy paper): 20% for withdrawals on or after 29 October 2026.
- Income Tax: removing the pensions tax two-year rule (HMRC policy paper): lump sum death benefits, drawdown annuities and overseas scheme drawdown. Effective date from the overview of tax legislation, 1.18.
- Definition of terminal illness for pensions access (HMRC policy paper): medical evidence from a practitioner outside the UK.
- Additional Council Tax charge on high-value properties (HMRC policy paper): owners of residential property in England worth £2 million or more, from April 2028.
- Tax on your UK income if you live abroad: rental income (GOV.UK): non-resident landlord rules, basic rate deduction, £100 a week tenant threshold, form NRL1i. Checked 25 October 2026 for the UK Tax Guide.
- Individual Savings Accounts: if you move abroad (GOV.UK): keep the ISA and its tax relief, no new payments while non-resident, pay in again once resident. Checked 25 October 2026 for the Pensions guide.
- Voluntary National Insurance: if you live or work abroad and rates (GOV.UK): Class 2 closed for time abroad from 2026/27; Class 3 at £18.40 a week in 2026/27 and the 10-year test. Checked 20 October 2026 for the UK Tax Guide.