The key facts
- John Healey is preparing a 'safe' budget: no alignment of CGT with income tax, a new levy on banks and reduced regulatory burden
- John Healey is preparing a 'safe' budget: no aligning CGT with income tax, a new levy on banks, and a reduction in regulatory burden
- People with combined wealth of about $160 billion on the Bloomberg index have left the UK in the two years since the abolition of non-dom status
- People with combined wealth of around $160 billion, according to the Bloomberg index, have left the UK in the two years since the abolition of non-dom status
- The Institute for Fiscal Studies estimates the need for tax rises or benefit cuts at roughly £35 billion due to plans to increase defence spending to 3% of GDP by 2030
A cautious approach after the turbulence of 2025
Chancellor John Healey's autumn budget can already be considered a partial success, according to The National: he managed to avoid the paralysis that preceded his predecessor Rachel Reeves's budget in November 2025. Back then, the drawn-out preparation, speculation and leaks caused nervousness in financial markets, halted property deals and pushed the wealthy to move abroad, forcing Reeves into policy U-turns. Healey, by contrast, ran a more controlled process: signals reached the press that he would not align capital gains tax (CGT) with income tax, that banks face a new levy, and that businesses would be freed from excessive regulation. His aim is to announce short-term cost-of-living support, stop the outflow of the super-rich and stabilise public finances undermined by spending pressure and the fallout of the US war with Iran.
The prime property market: the price of uncertainty
Prime London postcodes are suffering from sluggish sales: prices remain below the 2014 peak. Tom Bill, head of UK residential research at Knight Frank, hopes the main threats — such as an expansion of the 'mansion tax' — have already been taken off the table; he says September showed the first quarterly price rise (+0.3%) in prime central London in four years, largely thanks to the absence of tax speculation ahead of the budget. Sales of properties worth more than £5 million fell 14% in the 18 months after Reeves's first budget in October 2024, when stamp duty on second homes was raised from 3% to 5%; Knight Frank estimates the foregone revenue at £541 million. According to Beauchamp Estates, after the 2024 budget the number of deals on homes worth more than £5 million fell from 148 to 124, while the segment above £10 million dropped 25% (from 51 to 38 deals); the company nonetheless links the 2024 downturn to the Conservative policy of abolishing non-dom status, originally conceived under Rishi Sunak. Beauchamp Estates managing director Jeremy Gee sums up the main lesson: 'What kills a sale is not the tax, but not knowing what it will be.'
The wealth outflow and proposals to stop it
Over two years, people representing about $160 billion on the Bloomberg Billionaires Index have left the UK, following the abolition of non-dom status, which had allowed foreign income to go undeclared to British tax authorities. The relocation of British hedge fund founder Chris Rokos to Greece underscored growing discontent among local entrepreneurs as well. A survey of 500 business owners, conducted in August for the S&W group, found that about half would consider relocating if CGT were raised. The industry is lobbying for alternatives: the organisation Foreign Investors for Britain proposes an investor visa with a minimum investment of £2.5 million and a fixed annual tax of £200,000 for up to 15 years with a path to permanent residency, estimating the potential at more than £225 billion in inbound investment over a decade. The current replacement for non-dom status exempts foreigners from tax on foreign income for only the first four years, which FIFB head Lesley Macleod-Miller considers insufficient. Investor Konstantin Sidorov, whose London fund made more than 500% on a bet on fintech giant Revolut, called a separate wealth tax a 'red line' that would make him think about leaving.
The government's constraints and the cost of delay
After tax rises of more than £60 billion across Reeves's two budgets, Healey, according to James Nation of Forefront Advisers, simply aims to 'do no harm'. Big decisions — welfare reform, long-term defence investment — are being postponed; The National's sources in government call the budget a 'stepping stone', while the main structural document is the promised '10-year plan' speech by Prime Minister Andy Burnham due before Christmas. A Labour official admitted that 'everything has been kicked into the long grass', with revenue likely to come only from the bank levy, 'a couple of billion'. The Institute for Fiscal Studies warns that the plan to raise defence spending to 3% of GDP by 2030 will require tax rises or benefit cuts of roughly £35 billionThe editorial conclusion from these facts is this: the 2026 budget is above all a test of the Burnham government's ability to retain investors without new wealth taxes, and its outcome will directly determine whether the capital flight continues — a flight that has already affected the housing market, tax revenues, and the plans of entrepreneurs themselves.
