UK Budget 2025: What It Means for US/UK Dual Taxpayers

  • November 28, 2025
  • Posted by: Hansen Sweeney Team
  • Categories: News, Tax, US/UK
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The UK’s 2025 Budget brings mixed news for personal taxpayers. While measures like scrapping the two-child policy, increasing the minimum wage, and boosting state pensions offer some relief, there is also a quirky twist — a tax that decided to check out early instead of sticking around for the jackpot: Bingo Duty is gone from April 2026!

However, beyond the fun headline, several changes are set to increase tax liabilities, especially for dual taxpayers. Here is what you need to know:

Dividend and Savings Income Tax Increases

From April 2026, UK dividend tax rates will rise by 2% moving to 10.75% for basic rate, 35.75% for higher rate, while the additional rate remains at 39.35%. From April 2027, savings income will also be taxed more heavily, with rates increasing to 22%, 42%, and 47% across the respective bands.

Property Income Tax Reform

Starting April 2027, property income will be taxed at new UK-specific rates (22%, 42%, and 47%). If you own rental properties in the UK, these changes will influence both your UK liability and US reporting obligations.

Mansion Tax

High-value UK properties will face additional annual council tax charges: £2,500 for properties over £2m and £7,500 for those over £5m. This impacts estate planning and cash flow for dual taxpayers with significant UK property holdings.

Cash ISA Limit Reduction

From April 2027, the annual Cash ISA limit for those under 65 will drop from £20,000 to £12,000. While ISAs are not tax-free under US rules, this change may affect investment strategies and cross-border planning.

Pension Contributions Cap

From 2029, salary-sacrifice pension contributions will be capped at £2,000, with National Insurance charged on excess amounts. Dual taxpayers may want to review pension arrangements to avoid unexpected tax implications.

These changes highlight the importance of proactive planning for dual taxpayers. Adjusting investment strategies, reviewing pension contributions, and understanding cross-border tax credits will be key to minimising exposure and staying compliant.

Need Advice?

Hansen Sweeney specialises in US/UK tax complexities. Contact us to ensure your financial plans align with the new rules.