UK Autumn Budget 2026: What could affect Britons in France?

UK Chancellor John Healey has delivered his Autumn Budget today (October 28), setting out the government's tax and spending plans, including measures affecting the 2027–28 financial year and beyond.

Several previously announced changes are due to take effect in 2027, while other possible reforms have been discussed ahead of today's budget.

Here are some of the key issues relevant to Britons living in France or owning second homes here.

UK state pensions

The UK's triple-lock rules point to a 3.9% increase in state pensions from April 2027, meaning the full new state pension is expected to rise from £241.30 to £250.70 a week. For those on the earlier system, the basic state pension is expected to rise from £184.90 to £192.10.

The full new state pension will therefore reach £13,036 a year, exceeding the UK personal income-tax allowance of £12,570, which has been frozen for several years.

This includes for pensioners in France, who do not face pension freezes, unlike British state pensioners in some parts of the world.

The Chancellor said that there would be new measures so that pensioners with income up to the value of the new state pension would not pay income tax during this parliament (ie. before the next general election).

Note, however, for residents in France the UK state pension should be taxable only in France.

With regard to UK National Insurance payments, people who in the past have made top-up voluntary payments from abroad at the low Class 2 rate should note that they have until April 5, 2027 to apply to continue to pay at Class 3, under simple transitional measures. 

Changes to tax on gifts

Proposals to extend the seven-year rule on taxable gifts before a person dies, or establish a lifetime ceiling on tax-free gifts have not been adopted.

The seven-year rule normally allows a gift to fall outside the donor’s estate for UK inheritance tax purposes if they survive for seven years after making it.

Inheritance tax on unused pensions

An already announced change is due to take effect from April 6, 2027, but is not new in this Budget. 

It means most unused pension funds and pension death benefits will be included in estates for UK inheritance-tax purposes, removing an inheritance-planning advantage that many people have relied on in recent years.

The implications for Britons who have retired to France will depend partly on their UK inheritance-tax exposure and the applicable international tax rules.

Taxation of rental income

From April 6, 2027, UK income tax on profits from renting out property will rise by two percentage points under changes announced in the 2025 Budget.

The basic rate will increase from 20% to 22%, the higher rate from 40% to 42%, and the additional rate from 45% to 47%.

The increases will also affect people living in France who rent out property in the UK.

Under the Non-Resident Landlords Scheme, where UK tax is deducted from rental payments by a letting agent, the withholding rate will rise from 20% to 22%.

However, landlords can apply to HMRC for permission to receive their rent without tax being deducted, instead declaring the income and paying any tax due through a UK tax return.

French tax residents must also declare their UK rental income in France, with provisions under the tax treaty to avoid double taxation.

Capital gains tax

Chancellor Healey has rejected calls for further capital gains tax rate increases because of concerns about the effect on investment and tax receipts.

Exit tax

Proposals for an exit tax on unrealised capital gains when individuals leave the UK had been discussed ahead of the Budget.

However, tax specialists considered such a measure unlikely, citing practical complications and concerns about discouraging investment and people moving to Britain.

Such a tax could potentially affect some people planning to move from the UK to France, depending on its scope.

High-value homes in England

A new High Value Council Tax Surcharge was announced in 2025 and is expected to take effect in April 2028 for owners of residential properties in England valued at £2 million or more.

The planned annual charges range from £2,500 to £7,500, depending on property value, and will be payable in addition to ordinary council tax.

The government was reported to be considering lowering the threshold of this so-called ‘mansion tax’ to £1.5 million, but has not done so.

An additional surcharge specifically for non-UK-resident owners was raised in a government consultation this year, which considered whether such owners may be contributing to housing-market pressures.

No decision on this has, however, been announced.

Scotland is introducing its own version in 2028, for properties worth over £1 million.

Visas to work in UK

The government promises to reform the UK’s visa system with a bid in particular to help businesses by making it easier to recruit skilled workers. This could, notably, benefit French graduates looking to spend time working in the UK. 

This will include expanding a ‘High Potential Individual’ visa to graduates from the world’s top 150 institutions, changing visa salary requirements to help employers across the UK hire people more easily, extending a Graduate visa to two years for eligible universities, and giving the highest-skilled workers longer to find a new job.