What the 2025 Autumn Budget Really Means for Wealth Builders

Transcript

Speaker 1 (00:00.046)
It seems like every time there's a recurring income, there's an extra tax charge on it. Pretty much everywhere you look, the tax privileged investments are being restricted. To me, it was like a confusing budget. You shouldn't have 30 things to unpick. In my experience, they get overwhelmed by the rumors and what's going on, and they won't take the small action every month that we would like them to take.

Welcome to this week's episode of Wealth Talk. name is Christian Rodwell, the membership director for Wealth Builders, joined today by our founder, Mr. Kevin Whelan. Hi, Kevin.

Ciao Cristiano!

How was your trip to Italy Kevin?

good. I was really tired after burning the Midnight, whatever. Midnight all was truly brulade and getting all the budget guides ready and doing some sort immediate post-budget webinars live, which is testing. So I took a break to Italy and a bit of Lake Garda for a bit of relaxation and a bit of Verona and what light from young Wungto breaks, he says.

Speaker 1 (01:05.752)
Juliet's balcony, what a load of rubbish. Tourist trap for sure. Anyway, we're going to talk about not tourist traps, but tax traps today.

Glad you had it.

Speaker 2 (01:16.224)
Indeed. Well, it's been two weeks, hasn't it, since the budget and there were so many rumors flying around. what did you make of the big speech then, Kevin?

you say, the rumors were flying around and as you know, I don't believe in taking action on rumors. The big rumors are always the tax-free cash on pensions, which wasn't touched, of course. I think when you talk about the speech, the speech was interesting, but I think to me it was sort of a budget of threes, really. I've never seen a budget so late in the year and I couldn't quite work out.

other than they needed the time to tax us to the hilt. what was interesting for me felt a little bit like, did she deliberately choose it too far away from Halloween so it wouldn't become compared to some sort of Halloween ghoulish movie, which it could have been. You can see the headlines being written, the fiendish taxes and the fiendish finances from The Wicked Witch of Whitehall. It could have been that.

It have been sort of a Christmas pantomime, another wicked witch, no, she's behind you. But it could have been that. It wasn't that, but it was a comedy though.

There was lots of howling going on from the benches, wasn't there?

Speaker 1 (02:37.038)
Well, there was a lot of howling. It wasn't an uplifting budget for sure, but the comedy came really from the fact that I've never seen the OBR release the data before the budget. So everybody had read the budget before she read it. It was like a comedy, watching her, reading her text. You could see the phone and obviously it didn't ring, but you could see the phone. Then she was

She was giving daggers to somebody or other. And then she realized, of course, that the OBR had published the record and now somebody's head has rolled on that one. Yeah, and Kemi Badenok had obviously had plenty of time to read it. And she went to town and I think she was the horror story. I thought she was a bit harsh, really. But in terms of the speech and the whole process of the speech and that whole kind of budget.

I commend this budget to the House. All of that stuff was really a comedy. so she's the Grinch that stole Christmas. Well, she's the Wraith that stole a lot of money from us. And because she was wedded to the Wraith, so there's a budget of Wraiths, the Wraiths in terms of what she couldn't change, she couldn't change the rate of income tax, the rate of VAT, and the rate of national insurance for workers.

So what did we get? We got a smorgasbord that we had to pick through like a pick and mix. When you go to the movies and you pick all those little things to put in your bag and then you've got to sort them out and invariably you get some things that you like and some things you don't like, like any box of sweets. What's your favorite in a box and what do hate in a, in quality street or your chockeys? What do you like?

The purple ones, think that the hazelnut or the caramel ones.

Speaker 2 (04:42.51)
Talking of threes, perhaps what we can do just simplify things today. Now we're having a bit of fun because it's not the most interesting of topics. For all of our keen wealth builders, we could probably break it down into a few of the key announcements.

I mean, it's quick.

Well, let's look at the business owners, the property investors, and then we can include pensions and investments as well, I reckon.

Well, there are always a few headlines on there really, but you if you look at, well, look, I felt bashed as an older business owner. Okay. So why was I bashed? Well, first of all, most business owners when they're in control of their business, and I mean that in the loosest sense of the word control, they've got some flexibilities, haven't they, to be able to salary versus dividend and so on. That's generally how business owners pay. But the dividend.

charge went up. So in other words, you take dividends, you get charged an extra 2p or 2 % on that. you've now got two higher rates of dividend charge. They didn't somehow add the 2 % to the highest dividend charge, which still remains at 39 and something. They're all in that from 8 to 10 point and then

Speaker 1 (06:05.534)
So the rates were odd. I think they're just trying to find as many ways as possible to tax different people. And of course, that 2 % tax charge also got applied to the wider population on savings and the property owners who got taxed an extra 2 % on any income they've got. So you know how we like to focus on recurring income? It seems like every time there's a recurring income, there's an extra tax charge.

on it. I did notice that. but corporation tax stays unchanged. It wasn't too long that that was increased anyway, was it?

wasn't really the big budget bashing for my first budget was the increase in national insurance charges for employers, the reduction in the rate at which national insurance kicked in, and of course they introduced the higher minimum wage, which will affect some business owners, particularly those who are employing people at that sort of a level, which would automatically increase their cost.

Higher divi charge was a big one for me. think another one, you know, we've been talking about business owners always need an exit.

And in 2026, you know, they announced in the previous budget that if you were to sell, sorry, pass on your business, not sell your business, I'll come onto the selling of a business in minute. If you were to pass on your business, then because you die and you want to pass it on to your kids, then they'd already introduced their business protection, BPR, that used to be unlimited. If you pass on your business, it was unlimited what you could.

Speaker 1 (07:48.248)
pass it on for it was received by your children next to kin is a going concern. Now it's a million quid maximum with 50 % on anything over a million. So if you sell your business for 2 million quid or your business worth 2 million quid rather, keep getting myself in there because I've got the anxiety over the selling, right? Because as an older businessman, you want to sell or you want to think about that. It's unpunished to it in your locker. So anyway, the

The BPR is limited now to a million and then 20 % tax, which is an IHT tax for the excess. One good thing about that though is it never used to be available or transferable to a spouse. So you know how on the inheritor's tax, you've got 325 new rate band and the 175 and it's transferable to a spouse. that's where you've got 500 plus 500 giving a million.

a couple. didn't have that with BPR, but now you do. So thankfully, it's a good thing. It's one of the three good things that I saw.

Yeah, a few glimmers of light that were hidden away in there.

One or two. The other business owner bad thing was the EOT.

Speaker 1 (09:04.162)
which is an employee ownership trust and many business owners we know Chris don't want to sell their business to an acquirer. They want to essentially migrate it or gently pass it into the stewardship of their team, staff. And I like the concept of stewardship because it encourages shared principles, shared values, shared ownership. And I like that. So an EOT would.

definitely be something that would be on the rise to many older business owners. And that was completely IHT free.

until now, and it came in immediately. 50%. It's still a good relief. It's a capital gains tax, so it's still a decent tax relief. 50 % of the tax ordinarily would be paid. But overnight, 50 % cut means if you didn't get that one in time, you're going to be really

Well, you probably would have paid quite a lot of money to get your EOT and if you're banking on getting all the proceeds out tax free and now you're not, then that's a challenge, think, for some.

You just mentioned time there. And of course there's different timeframes from when some of these are going to kick in. And we've actually got a guide, which if you would like to download, you can head to wealthbuilders.co.uk forward slash budget hyphen guide. I'll put the link in the show notes because it may be that you need to do some planning. There will be, you know, certain months or maybe a couple of years. And if it's, you know, buying machinery, if you're a business owner, certain reliefs that'll be changing. So yeah, do be aware of the timeframes because that could make all the difference.

Speaker 1 (10:47.97)
Yeah, does. Originally, when she gave her views about what her intentions were, it was about stability because it's instability and insecurity that rocks markets, for example. So she said, I'll come with one budget, which will be my £40 billion budget, and I won't ask for any more money. And the second budget was a £26 billion budget.

she going to come back? But there were so many measures, some for immediate, some for 26, some for 27, some for 28, some for 29. It's like she's staggering it in, in a very unusual way that I've never ever seen before, ever. So many changes that have been announced that are coming. And one of those that really cheesed me off, not massive, but it's still a cheeser, is the mileage charge on electric cars. And you and I both drive electric cars, don't we? We don't want to be

on the one hand, being incentivized to be good for society and I suppose good for the world in terms of the carbon footprint and then be taxed on the other hand. Look, I understand it is what, three p.m. miles. I don't know how many miles you do, if a typical driver drives 8,000 miles, another 250 quid a year, it's neither here nor there, but it's still a confusing one because on the other hand, they're giving incentives to buy.

you know, these vehicles. yeah, to me it was like a confusing budget. It didn't really quite give me a real strong sense of anything other than, as I say, a pick and mix because she'd hemmed herself in by those three mainstays. Good thing on pensions though, yeah, the state pension triple lock was still in there. So that increased pension for those who are eligible 4.8%. I would encourage everybody to get a state pension forecast though. I'm sure you can put a link in the notes.

for people to do that because you want to know whether or not you're going to need to top up your national insurance contributions. if you do the forecast, it will tell you what you're in line for. We had that daft one, another comedy. Did you hear that one? So the current state pension, things like 12,527 or something. If you have to know exactly what the state pension is, you've got the wrong plan, right? But 12,500 and something.

Speaker 1 (13:18.126)
or 12,700 something. But the actual allowance before you pay tax is 12 and a half. So you're going to have hundreds and hundreds and hundreds, if not thousands of pensioners getting a teeny tiny bit of tax. Well, that was the plan. I think we've removed that now. They said, we're not going to tax people who've just got state pension. But I'm sure those people who are listening to this podcast, will not be the sort of people who are just going to get their income.

on the state pension. If so, tune in elsewhere.

So other things related to pensions, salary sacrifice restriction.

Yeah, that's an interesting one. Twist on that one as well for you. first of all, what is salary sacrifice? Well, it's a way for typically employed people to give up some of their salary as part of a contractual change. You agree with your employer, you're going to change the contract. So your contractual change says instead of receiving this sum that we've agreed,

as a salary, I'm going to sacrifice that salary contractually and I want you as my employer to pay that into my pension. And because the employer therefore wasn't going to pay employers national insurance on that portion, so say was 10 grand salary sacrifice, the employer would pay, what's it, 15.8, so 1500 quid more in tax in an I, they would

Speaker 1 (14:53.322)
If they agreed and not every employer did agree, most did, then will you pay that 1500 quid into my pension? Because it's neutral to you, but it's positively beneficial for me. And the employers would do that. Now they've capped that at two grand. Two grand! That's going to mess up employee people more than business owners. And that's in 2029, I think. So you've got time.

work that one through, but business owners don't have that problem because as I mentioned, if you're a business owner, whatever salary you choose to have is not sacrificed. So if you put money into your pension, it's a contribution. So you get full tax and national insurance concessions, which is an important thing to say, Chris, that when you're taxed more, you've got to be really tuned into the tax privileges that are out there. You know, as one loophole closes,

You've got to peer in to where the tax breaks are and maximize those tax breaks. So for the business owners, you've still got 60 grand you can pay in each year. So lean in and pay those pension contributions because you're still getting corporation tax back, tax-free growth. Yes, there's some IHT potentially to pay, but if you read the IHT pension guide, there are at least four ways.

You can use an assess to help you mitigate the analysis tax. So I still think there's big tax benefits to be had because they're cutting back for the under 65s for these are for investors. Now the cash isa.

That's been cut now to 12,000 for the cash iso, right? Well, combined value of 20.

Speaker 1 (16:40.152)
Yeah. And look, the reason for that is there's a thing, but I can't remember the exact figure, like 300 billion or something, a huge, huge sum of money in ISIS that they want to see more investing. Maybe this is the argument where the growth might come from. Restrict people of your age to 12 grand for cash. So forces you to invest more money if you want your 20 grand Israel allowance to put more of that money into the markets.

which is for investing, but will that go to UK markets? Will that go to US markets? Who knows? We don't know what will happen. It's a very interesting one, but if you're over 65, then you can still do your 20,000. So I think it's a little bit of help for the older people, but very little else other than if you're older, you've got estate pension, triple lock, you've got your 20 grand. I think that's it for the older folks. Because if you earn

If you weren't any savings other than your eyes, you're to pay an extra 2 % on them. because that also means people who've got investment bonds, you know, with their insurance companies and so on, because that's taxed the same way as income, but the fund pays it. So they're going to pay 2 % more in tax as well. don't think people know that they've got investment bonds. So I know we're getting a bit technical, but pretty much everywhere you look.

tax-privileged investments are being restricted. It's only really the 20 grand ISA. Even pensions are still, I still think, good value for money because you want to build the money up and the IHT, as I say, you can deal with it, especially if you've got a good enough time, a long enough time to plan.

I guess the comment from some people now, Kevin, if pensions are going to be included in your estate, are pensions still as good about as perhaps they used to

Speaker 1 (18:37.422)
That's a good question, Chris. And people sometimes say to me that, but I think if you truly understand the impact of the value of tax relief coming in and tax regrowth for decades, there's no inheritance tax to pay between spouses. And as I say, if you look at SAS in particular, which has got the pooling,

people combining their money together, which is a great thing for family planning in terms of family legacy planning. You've got the earmarking. You can cascade money between one member of a family and another because you can, anyone in the family over 18 basically can become part of that. And you've got the loan back facility, which allows you to lend up to 50 % of your pension to your company and your company could employ your children or indeed.

You could have your children as directors. So the value of that leaves the pension and goes into a company owned by your children, which therefore means you're bypassing the inheritance position. And in fact, for those people who've got grown up children or even children over 16, you could probably employ some of them. I mean, we've got young people these days, super smart with AI.

with all sorts of tech. So if you've got a business, you could employ, think one member we were talking to is employing their daughter for 200 quid a month, two and a half grand a year, reasonable, thinks she was 14, doing a bit of social media for the family and that's tax deductible. So it bypasses IHT as well because you can even pay that as a pension contribution. So there's so many ways that if you're paying attention and getting good guidance,

There are so many ways to walk through this elegantly. What most people will do though, in my experience, Chris, is they'll get overwhelmed by this mortgage board. They'll get overwhelmed by the rules. They get overwhelmed by the rumors and what's going on, and they won't take the small action every month that we would like them to take. So in the guide, or certainly the Pensions and Inheritance Tax Guide,

Speaker 2 (20:56.686)
Now available.

That is a cool. We've given four or five things people can do rather than like how many things have we just talked about there? I don't know, 30 individual items in a budget. You shouldn't have 30 things to unpick in a budget. It should be a few key headlines so everybody understands what to do and can make a plan. But when you've got 30 things, it's trying to draw all the threads together and you don't know how it affects your tax position, your assets.

your long-term plan, your children, you know, what year is it coming in and what's my, yeah, it's a mess. So the best thing to do is get the guy, just get clear and have a conversation with someone, us or somebody else you trust and say, right, here's my situation. What are the steps I should take given this situation on a piece of paper?

I mean, you spend a lot of time creating the IHT calculator so people could self check whether or not there's any inheritance tax to pay. We can't really create a guide for the whole of the budget. That would be too complicated, wouldn't it? To try and create a solution that combined 30 things crisscrossing. I can do it in my brain, but I can't do it on a calculator. Maybe I could employ my

son or daughter to do this.

Speaker 2 (22:26.152)
they do have £200 a month a

No, he would not know.

Okay. So I guess to summarize, really, we often talk about principles, don't we, at Wealth Builders? And essentially, you still want to be diversified across as many of the seven pillars of wealth as you can. And you want to increase your focus on recurring income from controllable sources and using tax advantage structures like a SaaS, looking at the different ways that you can protect your wealth, mitigate your tax, all the things that we

Maybe you can do it Chris.

Speaker 2 (23:01.512)
here to help you with. So do reach out if any of these changes are concerning you or leaving you with more questions, head to WealthBuilders website, you'll see a big red button, book a discovery call, feel free to do that and just have a chat with us. We've got lots of tools as we've mentioned, I'll link to those. The calculator, you can use that for free and the guides that we've mentioned as well, you can download those for free so you can understand things in more detail.

Here's the thing, Chris. If you get a good relationship with someone you can trust, and certainly I would hold ourselves out in high regard, not self-servingly, but just because we're obsessed about doing good work. The big thing that we know is true, and I think you summarized it quite nicely, creating controllable income, because life is very uncertain. There so many things you can't control.

But if you can control a few things, one of those would be pay attention to the recurring income that's leaving your life. Pay attention to your tax. If you're in business, your corporation tax. Pay attention to the fees that you're paying when you're investing money to try and build your wealth. Pay attention to the cost of your debt. Pay attention to

just two or three things during the course of a year which anybody could do. And then it gives you at least a sense of a little bit more because if you pay attention, you're trying to get in control. So switch it around if you can, so not just save money, but then turn those savings you make or those benefits you make and turn them into recurring income so you're creating certainty in a world that's fundamentally becoming less and less certain. And that would be my...

parting theme, create certainty. From our perspective, we changed the paradigm on thinking from retirement planning to wealth planning, from hoping for the best of planning and getting recurring income. Whenever we do work, Chris, and this is important to say out loud, we don't work on billable hours. We don't work like lawyers on hourly rates. We work on results and we get results.

Speaker 1 (25:25.378)
And if we don't get the results, we don't get paid. So we're happy that when anybody engages with us, they make more money than we charge. And we do that, or we can carry on working with them until we do make that money for them. So there's nothing to lose by having a chat. And then we'll show you how much money you can either make, save, or just get more control in a life where, geez, with the budgets keeps going like this.

It's going to be like a smorgasbord every, every year. I don't, don't know how to do another one, Chris. did my head in this one.

That's right. There's no better time of year, we lead up to Christmas to get that clarity and to have someone there as a guide that you can speak to. yeah, do reach out. We'd love to hear from you. And feel free to share this episode. If there's been any nuggets you think somebody else would like to hear, hit the share button, send it to them. And don't forget, click the links in the show notes to download all of those guides and access to the inheritance tax calculator.

By the way, just a quickie because there was one thing, Chris, I didn't mention, but I'll mention it now because I think I was definitely wanting a change to be made in legislation, which is, remember I talked to you a little while ago about it's the executors of somebody's will.

who's got the responsibility to collect all the information, to do a report to HMRC, pay the inheritance tax before they can distribute the money to the family. And the timeframe for paying IHT, inheritance tax, six months. And we said in a previous podcast, didn't we, there's no way the insurance companies are going to be able to

Speaker 1 (27:21.058)
Get the information that's known for the executives to find all the pensions that are unknown. And we know this ourselves because we encourage our members to find their lost pensions and to do all that in six months. Can't be done. They've changed it to 15 months. Not to pay the tax, only on the pension piece. So, you know, there are some things and you've got to be aware of that. So we'll write a guide probably in January. I just need to breathe out.

for executors so that they can discharge their job well and feel confident in being able to do that. So if you listening out there and you think I'd love Kevin, if you'd write a guide on this, you know, a subject that's dear to your heart, something that's always confusing you, then, you know, I'll, I'll take that under advisement and cause you see every time I write a guide, I have a holiday. So I'll have to have another holiday soon.

Why not? Why not? Okay, that's a nice place for us to end and we'll be back next week and that will be our final episode before Christmas where we'll take a little break and then we will rejoin in the new year. So do join us for that and Kevin, we'll be back same time, same place next week.

Yes and we'll be meeting each other in London for a bit of a Christmas special as well won't we? Until then my friend, see ya!

Speaker 1 (28:45.144)
We hope you enjoy today's episode. Don't forget that we are constantly updating our resources inside the WealthBuilders membership site to help you create, build and protect your wealth. Head over to wealthbuilders.co.uk slash membership right now for free access. That's wealthbuilders.co.uk slash membership.