Speculation about the upcoming budget for fall 2025 has reignited the debate over whether the Baby Boomer generation’s wealth—largely tied up in property and pensions—should face new or sharper taxes to tackle intergenerational inequality.
While headlines fixate on a single “wealth tax,” the reality for clients—especially UK expats—is more nuanced. Several policy shifts already on the books (and others widely trailed) could reshape how property, pensions, and inheritances are taxed in the next 24 months. This post sets out the practical implications and the sensible planning moves you can consider now.
- Wealth concentration is the political backdrop. The argument is simply that: Boomers own a disproportionate share of assets—chiefly property and pension wealth—so reform should target where the value is.
What this means for you: Don’t focus only on a hypothetical wealth tax. Track how existing rules might tighten—on property, pensions, and IHT—because that’s where changes tend to land first.
If you take one policy fact from 2025, it’s this: the UK is abolishing the “non‑dom” concept and moving to a residence‑based regime from 6 April 2025. That shift is set out in HM Treasury’s Spring Budget documents. In broad outline, residence—not domicile—becomes the key connector across UK tax (with detailed transitional and trust rules).
Why it matters for expats: Your exposure to UK tax—and the planning available—will increasingly turn on residence tests and asset situs, not a domicile analysis. That has knock‑on effects for IHT exposure over the long term (including settled assets), so it’s essential to revisit older non‑dom based strategies.
- UK property will stay a focal point for any redistribution agenda, because it’s visible, valuable, and administrable for HMRC. Press coverage also underscores a behavioural risk: wealthy individuals (including Boomers) may respond to tougher UK taxes by relocating—a visible trend in recent years.
Planning signal: Review your UK‑situs property footprint, debt levels, ownership structures, and the interaction with your country of residence (including treaty reliefs). Optimising for liquidity (to meet future IHT or other levies) is as important as optimising for rate.
Pensions: from “inheritance‑friendly” to potentially “in‑scope” by 2027
- Press reporting indicates that from April 2027 unspent private pensions could become liable to inheritance tax (IHT)—prompting families to re‑time withdrawals and gifting strategies. While we await final legislation, this is a critical planning assumption many are now modelling.
- We have been flagging this direction of travel in client briefings throughout 2025 when discussing year‑end planning and the shrinking headroom from frozen thresholds.
Planning signal: Model pension drawdown versus gifting while watching both income tax costs now and IHT exposure later. Do not overreact: the right answer balances longevity, investment growth, spouse protection, and cross‑border tax frictions.
What sensible, now planning looks like (for UK expats)
Below are practical steps we’re implementing with clients. These are policy‑robust moves: they help whether reform arrives as a new tax or a tightening of existing ones.
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Re‑map your UK exposure under the residence‑based regime.
With domicile receding, establish how the residence rules and asset situs will drive income, gains, and IHT for you from 6 April 2025—and how trust protections and transitional rules interact with your structures. -
Use existing allowances and reliefs fully while they exist.
- IHT annual gifting (including carry‑forward) can still move meaningful value over time.
- Pension annual allowance planning remains central (subject to tapering and personal circumstances).
- CGT annual exemption is much reduced—so don’t waste it.
These measures feature heavily in our 2024/25 year‑end guidance and remain relevant in 2025/26.
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Rebalance towards business relief where appropriate.
Where it matches your risk profile, qualifying interests (e.g., Business Property Relief) can shield value from IHT—subject to limits and hold‑period conditions. Our technical notes also highlight why timing and structure (outright gift vs. trust) matter in family succession planning. -
Stress‑test pensions for 2027 scenarios.
Model three cases: (a) “no change,” (b) “partial inclusion,” (c) “full IHT inclusion of unspent funds.” Adjust drawdown, beneficiary nominations, and inter‑spousal equalisation accordingly; consider the trade‑off between income tax today and IHT tomorrow. -
Property liquidity planning beats rate‑chasing.
If additional property levies or tighter IHT bite, liquidity (cash, credit, or saleability) will carry the day. Revisit leverage, co‑ownership, and whether a sale & diversify decision would reduce concentration risk without compromising family goals. -
Trusts: useful, but not a silver bullet.
Trusts can deliver control and protection, but they’re not cost‑free and will sit within the new residence‑based IHT logic. Decide with eyes open: beneficiaries’ residence, funding source, and long‑term governance all matter.
What we’re watching next
- Autumn fiscal events for threshold freezes, relief caps, or targeted property measures that raise cash without a headline new tax.
- Residence‑based regime secondary legislation & guidance—especially IHT treatment for long‑term residents and trusts.
- Pensions & IHT confirmation ahead of April 2027, to firm up drawdown and legacy planning.
- Mobility responses (and potential anti‑avoidance steps) as high‑net‑worth families consider jurisdictional moves.
This post provides general commentary based on publicly available policy materials and press reporting as at 21 August 2025. It is not personal tax advice. Always seek bespoke advice before taking action.
