Six key takeaways from W1M’s Budget Webinar

The Chancellor of the Exchequer finally delivered the Autumn budget last week after months of fevered anticipation. The statement itself was made in a somewhat chaotic atmosphere with key details being released to the public early by the Office for Budget Responsibility (OBR). The logistical difficulties on the day were preceded by a wide variety of policies being floated in the run-up to the event, making this Autumn budget one of the most memorable in recent history.

W1M gathered together some of our experts for a webinar to look beyond the headlines and reflect on a lively week in Westminster.

Here are six key takeaways:

Mansion tax: better than the alternative

Amongst all the kite flying, the mansion tax was one of the most discussed policies and also one that actually came to fruition. High-value properties will be subject to an annual council tax surcharge from 2028. The mansion tax property bands will be £2500 a year for properties worth £2-2.5m, £3500 for those worth £2.5-3.5m, £5000 for those worth £3.5-5m and a top rate of £7500 for properties over £5m.

W1M experts pointed out that a flat fee is preferable to a wealth tax with a percentage attached for many clients. Perhaps the prospect of the latter will surface again in the future, but for now, the controversial wealth tax is off the table.

Wrap up for the big freeze

The freezing of income tax thresholds until April 2031, three years longer than previously planned, was flagged as the most significant change announced by the Chancellor of the Exchequer and one set to raise tax revenue of nearly £13bn by 2031. The utilisation of so-called ‘fiscal drag’ where people drift into new tax bands as their wages rise is favoured by many politicians as it tends to raise extra revenue without the need for headline changes.

Be thankful for downed kites

This year’s budget was characterised by a plethora of potential policies being trailed in the press for weeks prior to the announcement. Now the main event is over, it is worth looking back at more of the suggestions that hit the headlines, if only to bank the knowledge about what might resurface again in the future. Major changes in gift tax and capital gains tax failed to materialise whilst the absence of controversial exit taxes also left high-net-worth individuals breathing a sigh of relief. There was also no major overhaul of inheritance tax.

Grey skies ahead

Webinar polling painted a somewhat gloomy picture on sentiment. An emphatic 99% of respondents felt the budget had made their tax affairs and investment decisions more complicated. Polling showed 53% of respondents felt less comfortable about their financial position after the budget. And 62% felt less confident about the short-term economic prospects for the UK.

Not much interest

A lively Q&A session at the end of the webinar threw up some interesting highlights. Jack Smith, Fund Manager, Fixed Income, at W1M, gave listeners a whirlwind tour of the interest rate environment. Jack explained that the market is expecting the US rate to fall to just below 3% by the end of 2026 and the UK rate to settle at 3.3%. He said he thinks the divergence is unfair considering the upward pressure the US is likely to experience on inflation because of tariffs. He added that the UK inflation picture is looking quite benign with some mechanical measures announced in the budget likely exerting downward pressure on inflation next year.

One-way tickets

 Tahir Mahmood, Head of Tax & Advanced Planning at W1M, fielded a question on whether we are seeing more people exit the UK off the back of the Autumn budget. Tahir explained that this wasn’t the case and the trend in people leaving the UK was more down to the previous budget that saw changes in the tax tail and various assets being brought into the inheritance net.

Watch the webinar on demand here.