Will 2025 Be the Year of Major Tax Changes? How to Prepare

As the UK moves through 2025, a number of significant tax changes are on the horizon.  

From changes to Capital Gains Tax (CGT) to potential reforms in Stamp Duty Land Tax (SDLT) and corporation tax, staying ahead of these shifts will be crucial for managing your tax affairs efficiently. This guide provides essential steps to prepare effectively for these tax changes before the 2025/2026 tax year.

Table of Contents

• Capital Gains Tax (CGT) – Will Rates Rise? 

  • How to Prepare for the 2025 Capital Gains Tax Rise

• Stamp Duty Land Tax Reforms – Potential 2025 UK Tax Changes

  • Staying Ahead of SDLT Changes in 2025

• Dividend & Corporation Tax – Planning for Business Owners 

  • Dividend vs. Salary: Tax-Efficient Choices for 2025

• New Non-Dom Tax Rules Coming in 2025 (FIG Rules)

  • Preparing for Non-Dom Status Changes in the UK

• Pension & Inheritance Tax Planning Ahead of 2025 UK Tax Changes

  • Strategies to Protect Your Wealth from Upcoming Tax Reforms

• Conclusion: Be Proactive in 2025 Tax Planning 

Capital Gains Tax (CGT) – Will Rates Rise? 

How to Prepare for the 2025 Capital Gains Tax Rise

One of the most discussed changes in UK tax circles is the potential rise in Capital Gains Tax (CGT) rates. CGT rates might align with income tax in 2025, significantly increasing taxes on property, shares, and other asset sales.

What You Need to Do Now:

• Consider Selling Before April 2025: If you have assets that have appreciated significantly, it may be wise to sell before any potential CGT rate increases. This could help lock in the current, potentially lower tax rates. 

• Explore Tax-Efficient Exit Strategies: Investigate ways to reduce your CGT liability by making use of annual exemptions or considering gifting assets to family members, which could result in lower taxes on capital gains. 

• Consult a Tax Advisor: Schedule a meeting with ASWATAX to assess your portfolio and develop a tailored strategy that considers both the anticipated rate changes and your long-term financial goals. 

Stamp Duty Land Tax Reforms – Potential 2025 UK Tax Changes

Staying Ahead of SDLT Changes in 2025

In 2025, we could see significant reforms to Stamp Duty Land Tax (SDLT), particularly given the challenges in the UK property market. With rising house prices and affordability issues, there is a growing call for changes to the way SDLT is structured. 

What You Need to Do Now:

• Stay Updated on Proposed Changes: Watch for any government announcements regarding reforms to SDLT. Higher rates on expensive properties or progressive SDLT structures could significantly impact your transaction costs.

• Explore Alternative Property Tax Strategies: You might want to explore alternatives such as purchasing property through a corporate entity, which may allow you to reduce SDLT liability. 

• Plan Ahead for Property Transactions: If you are planning to buy or sell property in 2025, ensure that you are prepared for any changes to SDLT. Adjust your plans and timelines accordingly to mitigate tax impacts. 
  

Dividend & Corporation Tax – Planning for Business Owners 

Dividend vs. Salary: Tax-Efficient Choices for 2025

Upcoming Corporation Tax and dividend tax changes mean business owners must carefully review income strategies for 2025. Possible higher dividend taxes could require reassessing how you structure your business income and personal remuneration.

What You Need to Do Now:

• Maximise Tax-Efficient Income Strategies: If you run a business, consider how to structure your remuneration. With potential changes to dividend tax, it might be more tax-efficient to increase your salary instead of taking dividends, depending on your situation. 

• Salary vs. Dividends in 2025: Given the proposed changes, business owners may need to adjust their approach. Reviewing the balance between salary and dividend payments could help minimise the tax burden in light of higher dividend tax rates. 

• Seek Professional Advice: It’s essential to consult a corporate tax expert who can help you determine the most tax-efficient way to withdraw profits from your business under the new rules. 
  

New Non-Dom Tax Rules Coming in 2025 (FIG Rules)

Preparing for Non-Dom Status Changes in the UK

The upcoming changes to the tax status of non-domiciled individuals (non-doms) in the UK will be significant in 2025. The government is expected to impose stricter rules around non-doms, particularly those with overseas income or assets. This will impact individuals who have claimed the non-dom status in the past and are now subject to stricter taxation. 

What You Need to Do Now:

• Review Your Domicile Status: If you are a non-dom, it’s important to review your status and how the proposed changes will affect you. If the rules change, you may find yourself subject to full UK taxation on your global income and gains. 

• Consider Becoming UK Domiciled: For some, it might be more advantageous to become fully domiciled in the UK rather than be subject to the new rules for non-doms. This decision should be made with the guidance of a tax professional. 

• Plan for Impacted Individuals: If you have significant overseas assets or income, ensure you are structuring your affairs in a tax-efficient manner ahead of the changes. This might involve setting up trusts or using offshore structures. 
  

Pension & Inheritance Tax Planning Ahead of 2025 UK Tax Changes

Strategies to Protect Your Wealth from Upcoming Tax Reforms

There is growing concern that pensions and inheritance tax thresholds could be reduced in 2025. Given the government’s desire to reform wealth distribution, now is the time to review your pension contributions and estate planning strategies to make the most of current allowances. 

What You Need to Do Now:

• Maximise Pension Contributions: If the pension allowance is reduced in 2025, you may want to maximise your contributions now. This could include taking advantage of annual pension limits to benefit from tax relief before any potential changes. 

• Prepare for Potential Inheritance Tax Changes: Review your inheritance tax strategy and consider making gifts during your lifetime to reduce the value of your estate. Take advantage of exemptions and tax-free allowances before the rules change. 

• Review Wealth Transfer Strategies: Ensure that your estate planning is up to date, using trusts or other tax-efficient strategies to manage wealth transfer. This can help minimise inheritance tax liabilities for your beneficiaries.
  

Conclusion: Be Proactive in 2025 Tax Planning

The 2025 UK tax changes are expected to bring about significant shifts in the way taxes are levied across the country. To make the most of current rates and allowances, it’s important to start planning ahead. Whether it’s managing your Capital Gains Tax, preparing for Stamp Duty Land Tax reforms, adjusting your business income strategy, or reviewing your inheritance tax plans, proactive steps now will ensure you are in the best position for the future. 

At ASWATAX, we specialise in helping individuals and businesses navigate complex tax matters. If you’d like advice on how to prepare for the 2025 tax changes, contact us today. 

Meet Omar Omar is a Chartered Tax Advisor (a.k.a an expert on tax issues) and founder of ASWATAX. He regularly shares his knowledge and best advice here in his blog and on other channels such as LinkedIn. Book a call today to learn more about what Omar and ASWATAX can do for you.

*Disclaimer: ASWATAX is a firm of Chartered Tax Advisors, and we strive to provide accurate, up-to-date tax insights. Tax laws may change, so this content is for general guidance only and not a substitute for professional advice. Seek independent tax and legal counsel before making decisions. ASWATAX is not liable for any loss from reliance on this information. Use at your own risk.