The UK Budget is on 28 October 2026. What is already law, what is only announced, and why a UK rate change moves your US bill through the foreign tax credit. Verified 4 October 2026.
The UK Budget will be held on Wednesday 28 October 2026. The date was confirmed by the Chancellor in a letter to the Treasury Select Committee published on 31 July 2026, which also asked the Office for Budget Responsibility to publish its economic and fiscal forecast on the same day. For a US citizen living in Britain, the productive way to spend the next three weeks is not guessing what will be announced — it is knowing which measures are already law, which are announced but unlegislated, and how a change to a UK rate quietly moves your US tax bill through the foreign tax credit.
> Every rate, threshold and date in this article is stated as at 4 October 2026, and the Budget is on 28 October 2026 — it could change any of them. We do not predict Budget contents, and nothing below is a forecast.
On Budget day the pattern is well established. HM Treasury publishes the Budget document on GOV.UK, the OBR publishes its Economic and fiscal outlook, and HMRC publishes an Overview of Tax Legislation and Rates — the document practitioners actually use, because it lists each measure, its start date, and whether legislation follows in a Finance Bill. At Budget 2025 it appeared on GOV.UK the same day. For primary material rather than commentary, that is the document to find.
Two cautions when you read it. A measure described in the Budget is an announcement: it becomes law only when a Finance Bill receives Royal Assent, typically months later and sometimes in amended form. And a start date is frequently years out — much of what was announced in November 2025 does not begin until 2027 or 2029.
| Measure | Status on 4 October 2026 | Effective | Why a US filer should care |
|---|---|---|---|
| FIG regime: four-year relief for foreign income and gains | In force (claims from 2025-26) | From 6 April 2025 | A claim costs the UK personal allowance and annual exempt amount, and leaves no UK tax to credit |
| Temporary Repatriation Facility | In force, time-limited | 2025-26 and 2026-27 at 12%; 2027-28 at 15% | The UK charge is not a credit against US tax on the underlying income |
| Dividend ordinary rate 10.75%, upper rate 35.75% | Enacted — Finance Act 2026 s.4 | 2026-27 onwards | More UK tax on your own company's dividends; recovery depends on your US credit position |
| APR/BPR: £2.5m allowance at 100%, 50% relief above | Enacted — FA 2026 Sch.12 | Transfers of value on or after 6 April 2026 | UK business and farm assets sit inside two estate tax systems at once |
| Savings income rates 22% / 42% / 47% | Enacted, not yet started — FA 2026 s.5 | Tax year 2027-28 | More UK tax on interest, in the Form 1116 basket already usually in excess credit |
| Separate property income rates 22% / 42% / 47% | Enacted framework (FA 2026 s.6); rates announced | Tax year 2027-28 | UK rental profits taxed at standalone rates; the US computation differs again |
| Unused pension funds and death benefits inside the estate for IHT | Enacted — FA 2026 ss.66–71 | Deaths on or after 6 April 2027 | Personal representatives become liable for reporting and paying |
| Inheritance tax nil-rate band freeze extended | Enacted — FA 2026 s.72 | Through 2030-31 | Fiscal drag on estates that may also face US estate tax |
| Making Tax Digital for Income Tax: £30,000 threshold | In force | 6 April 2027 (then £20,000 from 6 April 2028) | Quarterly UK filing on top of annual US filing |
| Salary sacrifice: £2,000 cap on the NIC exemption | Announced only — no legislation yet | 6 April 2029 | Changes the cost of UK pension funding, already delicate for US filers |
| Taxation of UK-resident members of US LLCs | Consultation closed 31 July 2026, no outcome | None | Would address the UK/US credit mismatch — nothing has changed yet |
Since 6 April 2025 the remittance basis has gone, replaced by the foreign income and gains (FIG) regime. HMRC's manual is direct: relief runs for a maximum of four consecutive tax years for a "qualifying new resident", beginning with the first year of UK residence after at least ten consecutive tax years of non-UK residence, and no claim is possible for anything accruing before 6 April 2025. It is claimed source by source on the Self Assessment return, and year one does not carry forward — you claim again each year or lose it.
The trade-off is not optional. HMRC confirms that a foreign income claim, a foreign gain claim or an overseas workday relief election costs you the personal allowance and the CGT annual exempt amount for that year. For a US citizen the arithmetic is sharper: income the UK does not tax generates no UK tax to credit, so a FIG claim can shift the whole burden across the Atlantic. More in our guide to the FIG regime for US citizens in the UK.
HMRC's guidance is unambiguous that the TRF "is a temporary measure, available for a fixed period of 3 years: the 2025-26, 2026-27 and 2027-28 tax years." The charge is 12% of qualifying overseas capital designated in a return for 2025-26 or 2026-27, and 15% for 2027-28.
That makes 2026-27 — the year you are in now — the last at the lower rate. The window is finite and does not depend on the Budget. The US treatment is a separate question: see the Temporary Repatriation Facility and US citizens.
Finance Act 2026 s.4 substituted 10.75% for the dividend ordinary rate and 35.75% for the upper rate, for 2026-27 onwards. It did not change the additional rate.
Finance Act 2026 Sch.12 limits agricultural and business property relief to a £2.5 million allowance at 100%, with 50% relief above it, for transfers of value made on or after 6 April 2026. Unused allowance is transferable to a surviving spouse or civil partner, and transitional provisions catch transfers made between 30 October 2024 and 5 April 2026 where the transferor later dies. The allowance began as £1 million and was raised to £2.5 million by announcement on 23 December 2025 before being legislated — a reminder that announcements are not final figures.
Savings and property income, 2027-28. FA 2026 s.5 sets the savings basic rate at 22%, the higher rate at 42% and the additional rate at 47% for 2027-28 — two points above the current main rates. FA 2026 s.6 creates separate property income rates from 2027-28, with the percentages determined by Parliament each year; the Government's policy paper states them as 22%, 42% and 47%. Treat the framework as law and the property percentages as settled policy still needing an annual rate-setting step.
Pensions and inheritance tax, April 2027. FA 2026 s.66 inserts a new s.150A into the Inheritance Tax Act 1984, treating a scheme member as beneficially entitled to "notional pension property" at death, and s.71 applies ss.66–70 to deaths occurring on or after 6 April 2027. HMRC's guidance confirms that personal representatives, not scheme administrators, become liable for reporting and paying; that death-in-service benefits and dependants' scheme pensions from defined benefit or collective money purchase arrangements are out of scope; and that personal representatives can direct a scheme to withhold 50% of the taxable benefits for up to 15 months from death and have the tax paid from the amount withheld. For a US citizen there is a second system in the room: see inheriting a UK pension as a US person.
Making Tax Digital for Income Tax. HMRC's guidance sets the phases: qualifying income above £50,000 (tested on the 2024-25 return) from 6 April 2026, above £30,000 (tested on 2025-26) from 6 April 2027, and above £20,000 (tested on 2026-27) from 6 April 2028. With UK rental or self-employment income alongside a 1040, April 2027 is the step to diarise.
Salary sacrifice — announced, not legislated. The Government's policy paper states that from 6 April 2029 the NIC exemption on employee pension contributions made through salary sacrifice will be capped at £2,000 a year, with primary legislation to be introduced treating amounts above that as earnings for Class 1 National Insurance. As at 4 October 2026 that legislation has not been introduced. It is a real announcement with a real date — it is not yet law.
Your US foreign tax credit is limited: the IRS puts it as "the smaller of the amount of foreign tax paid or accrued, or the amount of U.S. tax attributable to your foreign source income." Unused foreign tax carries back one year and forward ten, then expires. Two consequences follow, and both run against intuition.
A UK rate rise can be pure cost. If the UK tax on a category of your income already exceeds the US tax on the same income, extra UK tax buys you nothing in the US. It creates more excess credit in a basket where you probably already have more than you can use, and that credit eventually expires.
A UK rate cut can increase your US bill. If a UK reduction drops the UK tax below the US tax on that income, your credit falls with it and the US collects the difference — the relief moves from HM Treasury to the US Treasury and your total tax is unchanged.
Take £10,000 of UK bank interest above any personal savings allowance, belonging to a US citizen who is UK resident and a higher-rate taxpayer. US figures are expressed in sterling and exchange rates ignored — a simplification for illustration only.
The lesson is that "good news in the Budget" and "good news for your household" are different statements when you file two returns. If you are already carrying unusable credits, our guide to foreign tax credit carryovers for US expats explains how to track and use them.
This is live rather than speculative. HMRC ran a consultation, UK-resident individual members of LLCs and other reverse hybrids, from 10 June 2026 to 31 July 2026. It is closed; GOV.UK records that responses are being analysed and no outcome has been published.
The problem it addresses is the credit mismatch that followed the Anson litigation: where the US treats an LLC as transparent and the UK does not treat the member as taxable on the same profits in the same way, double tax relief can fail. Until legislation changes it, HMRC's published position stands. If you hold an interest in a US LLC while UK resident, read US LLCs and UK resident members — and plan on the current rules, because that is what the law says today.
None of this depends on knowing the contents.
1. Fix your figures. Pull your UK income by category for 2026-27 to date — employment, dividends, interest, rental, gains — and set your US position alongside it. You cannot assess a measure against a position you have not measured.
2. Review your excess credit by basket. Whether you are in excess credit or excess limitation in the general and passive categories, and how old your carryovers are, decides whether a UK rate change helps or hurts you.
3. Decide disposals on their merits first, timing second. Accelerating a sale to beat a rumoured change is a bet on a rumour.
4. Finish the TRF analysis this tax year. 2026-27 is the last 12% year — a legislated deadline, not a guess.
5. Make UK pension contributions on a plan, not a reflex. What works for a UK-only taxpayer can be unhelpful for a US filer.
6. Keep the records. Contemporaneous notes on residence days, remittances, TRF designations, disposals and valuations make a position defensible years later.
7. Do not restructure on a prediction. Unwinding a structure built for a measure that never arrived is expensive and sometimes impossible.
A commitment, stated plainly: on 29 October 2026, the day after the Budget, we will re-verify every rate, threshold and deadline published on this site against GOV.UK, legislation.gov.uk and HMRC guidance, and correct anything the Budget changed. Our calculators and guides are maintained against a dated register of sources precisely so that a Budget triggers a re-check rather than a rewrite from memory. Until that sweep is complete, the figures here carry the 4 October 2026 date given above.
Most of the work above is measurement rather than cleverness: your figures by category in both countries, your credit position, and the deadlines already fixed in law. Do that much before 28 October and you will read the Budget better than most people with an accountant.
Where it is worth paying for judgement is the interaction — a FIG claim that changes your US exposure, a TRF designation in its final low-rate year, a disposal or pension contribution that is sensible on one side of the Atlantic and counterproductive on the other. At Next Tax Source every US return is reviewed and signed by a licensed CPA or Enrolled Agent and every UK return by an ACCA-qualified accountant, and we work as tax specialists for US and UK filers rather than two advisers who never speak. To have your position measured before Budget day, book a consultation. This is general information about UK and US rules as at 4 October 2026, not advice on your circumstances.