In general, wealth managers were pleased at no surprises in this statement – a relief following the pre-announcement dramas ahead of last November's annual UK Budget.

While the UK government’s “spring statement” yesterday did not add new tax levies on high net worth individuals, they confirmed a path of higher tax burdens against a challenging international and domestic economic background.

The finance minister, aka Chancellor of the Exchequer, Rachel Reeves wanted to introduce only one major fiscal event a year, avoiding surprises for the markets. In the approach to her annual Budget, held in November last year, she was widely criticised for allegedly leaking details in advance and causing speculation, arguably weakening investor confidence and encouraging wealthy individuals to leave the UK.

Since the Budget, war has erupted between Israel/US and Iran, leading to a sharp rise in oil and gas prices, falls to equities and reduction in risk exposures. It is unclear how long the conflict will last as the regime in Tehran seeks to retain power. The Strait of Hormuz – through which about 20 per cent of the world’s oil moves – has been blocked to shipping at the time of writing. While there will be supply adjustments, the conflict will rattle investors. The UAE – now a major wealth management jurisdiction – has been attacked by Iran, and other Gulf states have been hit. Ironically, Dubai and other jurisdictions had seen an influx of UK citizens, non-domiciled residents and others since Reeves hiked taxes and shut the non-dom system in her first Budget in November 2024.

The government confirmed that the Office for Budget Responsibility (OBR) – the group of economists that governments in the UK use to check and validate public finances – has downgraded UK economic growth for this year to 1.1 per cent, citing a “fragile UK economy." Reeves said that "average growth across the forecast period is largely unchanged." She added: "While the OBR has adjusted the profile of gross domestic product (GDP) so that it grows slightly slower in 2026, and faster in 2027 and 2028."

“There were no further changes announced to the plans to bring pensions into taxable estates, to start from April 2027. Whilst we’re still awaiting clarification on the administration of this – it’s not too early to start planning for this change,” Robbie Hewitt, wealth planner and Jeremy Croysdill, executive director, wealth planning at Brown Shipley, said. 

“The increase in dividend [tax] rates from 6 April will go ahead. Business owners who can control their dividend payments could accelerate their dividends before this April to benefit from the current tax rates,” they said.

The government is not making further easements to the impact of putting family farms and businesses into the inheritance tax net, Hewitt and Croysdill noted. 

“There are no further changes to the Business Property Relief (BPR) or Agricultural Property Relief (APR). It still stands that from the 6 April, the BPR limit will be £2.5 million ($3.34 million) (transferrable between spouses). Those who have qualifying assets should get their skates on – they may still have time to engage with planning before these are implemented," they added.

Fiscal drag – the effect of not raising tax thresholds in line with inflation – remains a “silent tax” that will squeeze incomes, commentators said.

“The Chancellor argues that individuals are now better off by £1,000 per year. However, the fiscal drag caused by the freezing of personal allowances, rate bands and thresholds until April 2030 combined with some potential inflation in the short term means that people will feel the burden of [the] cost of living,” Winnie Cao, partner at Blick Rothenberg, an audit, tax and business advisory firm, said. 

Her colleague, Robert Salter, a director, had mixed views in his assessment of the statement.

“Though there is often much to recommend that any Government following a ‘steady as she goes’ approach to the economy and taxation. In some ways it is positive that Ms Reeves hasn’t announced any specific tax changes, but many of the areas that Rachel Reeves focused on during her speech are perhaps problematic from a wider perspective given recent world developments,” Salter said. 

“While it is clear that Rachel Reeves has placed some value on areas such as the £820 million in additional training being made available to train young people, though this policy decision had been previously announced by the government, it is questionable whether this extra investment will overcome the negative impact of changes such as the increase in employer’s National Insurance Contributions (NICs) and the share increase in the national minimum wage, especially for younger workers, which appear to be at least partly a response for the significant increase in youth unemployment over the past 20 months,” Salter said.

"The Chancellor had hoped this fiscal event would attract less scrutiny and volatility than previous ones, and so far that appears to be the case. This reflects, in part, the reduced significance of the Spring Statement following the shift to a single major fiscal event each year, as well as a marginally improved fiscal outlook,” James Ringer, fund manager, global unconstrained fixed income, Schroders, said in a note. 

"There were only minor changes to policy and so the focus was on the Office for Budget Responsibility's projections and Debt Management Office's (DMO) gilt remit. For us, the most important update came from the DMO. We had guidance that the public sector finances were looking better than expected back in November – thanks to better tax receipts, lower government spending and lower interest rates – and that was confirmed today. Although at the upper end of forecasts, the £252 billion borrowing planned for 26/27 was still a large improvement from the previous year, and we saw another decline in the portion allocated to the long end [of the bond market].”

The updated fiscal outlook released by the OBR shows a significant increase in the estimated capital gains tax take compared to the Autumn Budget 2025.

In total, between 2025-26 and 2030-31, CGT is now predicted to collect £19.9 billion more in tax than estimated at the Autumn Budget. CGT receipts are now expected to raise to £34.9 billion in the tax year 2030-31, a £5.1 billion increase compared to forecasts made for the Autumn Budget.

“It demonstrates that, far from being a one-off consequence of asset disposals, the increased rates and other policy changes announced at the Autumn Budget 2024 are creating a significant, longer-term trend of accelerating CGT collections,” Simon Martin, head of UK technical services at Utmost, said. “CGT is no longer a marginal consideration in long-term wealth planning, and a tighter fiscal regime further increases the premium on forward planning.
Entrepreneurs contemplating business sales, families managing intergenerational wealth transfers and globally mobile individuals with multi-jurisdictional assets will all need to reassess the timing and structure of disposals.”