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The UK Chancellor announced significant changes in the UK Budget 2025, introducing new policies that affect many UK nationals. These reforms are prompting many high-net-worth individuals to consider alternative, tax-friendly countries for their domicile. Now might be the perfect time to explore relocating to Malta!
More on the UK tax changes introduced earlier this year and new measures from today’s speech
Earlier this year, the UK implemented substantial tax reforms that have already significantly impacted high-net-worth individuals (HNWI) and non-domiciled residents. The government has been pursuing plans to raise additional revenue by tightening tax regulations across multiple areas. Building on these changes, the recent budget speech introduced further measures creating a challenging outlook for HNWIs with limited time to adapt to both recent and today’s newly announced rules.
Details of the key changes
- Capital Gains Tax (CGT) rates on residential property and carried interest were increased earlier this year from 10% to 18% for basic-rate taxpayers, and from 20% to 24% for higher-rate taxpayers. Today’s Budget reiterated these rates and included clarifications on the application of CGT to non-resident disposals, further tightening cross-border tax rules affecting property and assets.
Sources: uk Budget 2025, KPMG UK Tax Update - Inheritance Tax (IHT) adjustments introduced earlier this year reduced the £325,000 nil-rate band and the £175,000 residential nil-rate band, increasing tax liabilities on estates. Today’s Budget added new caps on reliefs for trusts and refined rules limiting IHT charges on trusts linked to former non-domiciled residents.
Sources: uk Budget 2025, The Guardian Budget Live - Non-Domicile Status Abolition: As introduced earlier this year, the UK abolished the non-dom regime that allowed UK residents to use a remittance basis for foreign income. UK residents are now taxed on their worldwide income, increasing tax exposure for many high-net-worth individuals with international assets. The Budget reiterated this position and confirmed ongoing enforcement and compliance efforts.
Sources: uk Budget 2025, Reuters UK Budget 2025 - Foreign Income and Gains (FIG) Regime: This regime, effective earlier this year, applies to individuals who have been UK tax residents for fewer than four years after a minimum 10-year non-residence period. Qualifying individuals enjoy a four-year exemption from tax on foreign income and gains remitted to the UK. The recent Budget confirmed no changes to this relief but emphasised monitoring and anti-avoidance enforcement.
Sources: uk FIG Guidance, [HMRC Internal Manuals] - Property Taxes: Earlier this year saw changes to Stamp Duty Land Tax (SDLT) and the Annual Tax on Enveloped Dwellings (ATED). Today’s Budget introduced further technical clarifications and tightened reliefs on property held via companies, increasing the tax burden on property transactions and corporate ownership structures.
Sources: uk Budget 2025, KPMG Property Tax Update - Personal Tax Adjustments: Income tax personal allowances have been frozen since earlier this year, causing “fiscal drag” that effectively raises tax liabilities over time. National Insurance Contributions remain increased, impacting higher earners. The Budget reiterated these trends and confirmed no reversal plans.
Sources: uk Budget 2025, Financial Times Budget Coverage - Trusts & Settlements: Today’s Budget introduced new caps on inheritance-tax charges relating to trusts, particularly affecting trusts connected with former non-dom residents. Updated HMRC guidance and administrative rules reflect these changes, increasing compliance complexity for trusts and estates held by HNWIs.
Sources: uk Budget 2025, The Guardian
What is confirmed – new rules affecting expensive homes and property income
- The government is introducing a new High Value Council Tax Surcharge (HVCTS) on residential properties in England valued at £2 million or more.
Sources: uk Budget 2025, MoneyWeek Budget 2025 - The surcharge will start in April 2028.
Source: MoneyWeek Budget 2025 - The surcharge bands will be roughly £2,500 per year for properties in the £2.0–2.5 million range, rising to £7,500 per year for properties worth £5 million or more (before inflation uprating).
Source: uk Budget 2025 - The surcharge will be levied on owners of the property (not necessarily occupiers), meaning owning a high-value home—including second homes or properties owned via companies—could trigger the surcharge.
Source: uk Budget 2025 - The 2025 Budget reaffirmed broader changes to income from assets taxation: from April 2027, separate tax rates will apply to property income (22% basic, 42% higher rate, 47% additional), increasing the tax burden on rental income or income from properties.
Source: uk Budget 2025 - Dividend income and savings income tax rates will rise (dividends up 2 percentage points from April 2026; savings income rates up 2 percentage points from April 2027), indirectly impacting individuals holding asset income (though not strictly property).
Source: uk Budget 2025
What is not confirmed (or still speculative) as of today
- There is no confirmed increase in a one-off or annual capital gains tax (CGT) specifically targeted at primary residences above £2 million in the official Budget documents. While some pre-Budget press speculation mentioned a “mansion tax” or CGT on expensive homes, the final Budget text does not establish a CGT change tied to a £1.5m/£2m sale threshold.
Sources: uk Budget 2025, The Guardian Budget Live - There is no new announced corporation tax rise today targeted at property-holding companies beyond the existing measures (e.g., higher rates on SDLT/stamp duty for companies/non-natural persons buying dwellings introduced in 2024). The 2025 Budget focuses on personal/asset-income taxation, property surcharge, and income from assets categories.
Sources: uk Budget 2025, KPMG Budget 2025 Analysis - While earlier (2024) increases to the higher rates of Stamp Duty Land Tax (SDLT) for additional dwellings and non-natural persons (companies) remain in force, the 2025 Budget does not announce further increases to SDLT rates for 2025/2026.
Source: uk Autumn Budget 2024
What this means for high-value homeowners and companies
- Owners of residential properties valued at £2 million or more in England should expect to pay an annual surcharge on top of their regular council tax, starting in 2028 – a recurring holding cost for high-value homes, including second homes or investment properties.
- Individuals earning rental income, dividends, or savings income – especially from property or asset portfolios – should expect higher tax rates under the upcoming tax-on-assets reforms starting in 2027.
- Companies or trusts holding UK residential property should carefully assess whether the surcharge applies, since it is levied on “property owners,” which may include corporate owners.
- Because some pre-Budget speculations (e.g., CGT on expensive home sales) did not make it into the final Budget, property owners should plan based on formally legislated measures (HVCTS, asset income tax increases) rather than leaks or speculative reports.
What lies ahead for the UK’s non-domiciled residents?
The removal of the non-dom tax status earlier this year, combined with the introduction of the FIG regime, has caused many non-domiciled residents to reassess their UK tax exposure. Today’s new Budget measures on trusts, inheritance tax reliefs and property taxes add further considerations for those with complex cross-border assets. Careful review of asset values, tax structures and potential double taxation risks is now more important than ever for many UK residents.
Why consider Malta?
Malta offers a stable and transparent tax framework with attractive residency programmes designed for high-net-worth individuals. It operates a residence and domicile system that, combined with a network of double taxation treaties and favourable personal tax rates, can provide opportunities for tax optimisation. Malta’s strategic location within the EU and its lifestyle benefits make it a compelling option for those seeking to manage their wealth and residency more efficiently amid the UK’s changing tax environment.
Are you one of those that are considering leaving the UK to move to a more tax-friendly country? If so, let’s first look at the long-standing relationship between Malta and the UK
Malta has an enduring connection to the UK and gained independence from the UK only as recently as 1964, where after it joined the Commonwealth. Malta was also awarded the George Cross by King George IV in 1942, so it is clear to see why the islands are so loved by countless Brits. The islands offer a desirable lifestyle and many financial advantages for wealthy residents, especially for those who are considering investing in property.
The advantages you will enjoy when moving to Malta
- There is no Wealth Tax in Malta: One of Malta’s primary draws for high-net-worth individuals is its lack of a Wealth Tax. Unlike the UK’s impending tax plan, Malta does not impose taxes on worldwide assets simply for owning them.
- Malta has no Inheritance Tax: Malta also lacks inheritance tax, unlike the UK, where inheritance tax rates can reach 40%. In Malta, only a 5% causa mortis duty applies, allowing you to pass on your wealth without excessive tax concerns. Frank Salt Real Estate can help you find properties that serve as ideal investments for future generations.
- Attractive residency and tax programmes: Malta offers programmes like the Malta Permanent Residence Programme (MPRP) and the Global Residence Programme (GRP), providing a flat tax rate of 15% on foreign-sourced income brought into Malta under the GRP. By purchasing a qualifying property through Frank Salt Real Estate, you can benefit from these tax-efficient residency schemes.
- Malta also offers the option of acquiring citizenship called the Malta Citizenship by Merit (2025 Framework): Malta’s 2025 civic recognition framework celebrates exceptional individuals whose contributions have delivered lasting national benefit. Rooted in values rather than transactions, it honours those who demonstrate innovation, integrity and deep connection to Malta across fields such as enterprise, culture, science, sustainability and philanthropy. Guided by the amended Citizenship Act, recognition follows a discreet, multi-stage review based on merit, contribution and years of meaningful engagement in Malta. In rare cases, this may culminate in citizenship as an honour of merit. Recipients form a lasting bond with Malta and, in some cases, their families share in this legacy, reflecting profound mutual commitment.
If you want to have an overview of all the residency options on offer, click here.
- Thriving property market: Malta’s property market is very dynamic, offering excellent investment potential and capital appreciation. Here you can choose from luxury countryside villas to modern seafront apartments or ancient heritage homes and even palaces. Frank Salt Real Estate has a large variety of high-end properties that not only promise a beautiful Mediterranean lifestyle but are also sound financial investments with no concerns about wealth or inheritance tax. Want to see properties are on offer? Click here.
- An unmatched lifestyle: Beyond tax advantages, Malta’s lifestyle is exceptional. With over 300 days of sunshine, stunning coastlines, a rich cultural heritage and excellent healthcare and education systems, Malta offers an ideal blend of work, relaxation and family life. Its strategic location also provides easy access to Europe, North Africa, and the Middle East and with its international airport at Luqa, major European destinations like Monaco, London, Paris, Barcelona, Munich and Rome are only a two-hour-plus flight away! Find out here why so many UK nationals have already relocated to Malta!
More about Frank Salt Real Estate
If you are considering relocating to Malta, the Frank Salt Real Estate Group should be your go-to partner to make the transition effortlessly. We can find you the ideal home to buy or rent and even assist with obtaining residency or Maltese citizenship! We specialise in anything related to the buying and selling of residential, commercial and rental properties and we also have divisions that deal with property management and home interior services. Frank Salt Real Estate was founded in 1969 and each year has helped countless foreign nationals to relocate to Malta. We provide access to other professional services such as insurance, relocation, immigration and taxation through our bespoke connections. Our reputation for getting things done has made us the trusted relocation partner for clients worldwide.
Why Choose Frank Salt Real Estate?
Our team brings with them the experience and expertise needed to ensure you achieve your property and relocation goals and we will be personally guiding you every step of the way. If you want to know more about us, click here.
The takeout
Moving your residency or domicile to Malta can be a strategic way to protect your assets and legacy. With our current favourable tax regime and an appealing lifestyle, Malta presents an excellent option for safeguarding your family’s financial future. If you are contemplating the move, now is the time to contact us at Frank Salt Real Estate and benefit from our trusted guidance.
