The Chancellor's Autumn Budget contains a number of announcements that could affect people who are separating, contemplating divorce or negotiating a financial settlement.
Although the Budget does not change the law governing divorce or the division of matrimonial assets, it may affect the income available to each spouse, the cost of maintaining separate homes and the value of assets after tax.
Some measures offer welcome financial support, while others could make life more expensive or require careful planning.
We look at the key announcements and what they could mean for separating couples.
Higher Taxes on Savings and Rental Income
One of the more significant changes is an increase in tax on income from savings and property.
From April 2027, the tax rates applying to savings income, and to property income in England, Wales and Northern Ireland, will rise to:
24% for basic-rate taxpayers
44% for higher-rate taxpayers
49% for additional-rate taxpayers
These changes could be particularly relevant where one spouse receives a substantial cash settlement or retains investment properties following divorce.
For example, a spouse who keeps a buy-to-let property may find that the rental income they receive after tax is lower than previously anticipated.
Similarly, someone relying on interest from a lump-sum settlement to meet their living expenses may receive less net income.
On a more positive note, the Government has decided to retain the £20,000 annual cash ISA allowance, enabling individuals to continue sheltering some savings from income tax.
Mixed News for Business Owners
The Budget contains two particularly important announcements for business owners.
First, the Government is introducing a new Founders' Relief, which will allow qualifying founders of high-growth, innovative businesses to pay Capital Gains Tax at just 10% on up to £10 million of lifetime gains.
The relief is intended to take effect from 6 April 2027, although detailed eligibility requirements are still subject to consultation and legislation.
This could be very valuable where a spouse owns a successful business and is considering selling shares, whether during divorce proceedings or afterwards.
However, not every business owner will qualify. The proposed conditions include significant initial share ownership, a minimum holding period and demanding business growth requirements.
There may also be complications if company shares are transferred from one spouse to another as part of a divorce settlement. The receiving spouse should not assume that they will qualify for the same relief. Specialist accountancy advice will need to be taken.
Less positively, the Government is reducing the lifetime limit for Business Asset Disposal Relief from £1 million to £500,000 from April 2027.
This could increase the tax payable by some business owners when selling a company.
Additional Costs for Owners of High-Value Homes
The Budget also confirms the Government's intention to proceed with the High Value Council Tax Surcharge, originally announced in 2025.
From April 2028, owners of residential properties in England valued at £2 million or more will face an additional annual charge.
The proposed charges range from £2,500 a year for properties valued between £2 million and £2.5 million to £7,500 for properties worth more than £5 million.
This could be particularly relevant in London and the South East, where the family home may represent a substantial proportion of a couple's wealth.
Importantly, the surcharge is intended to apply to property owners rather than simply the person living in the property. Joint owners may therefore remain liable even where one spouse has moved out.
Why Careful Financial Planning Matters
For couples negotiating a financial settlement, it is important to consider:
The after-tax income available to each spouse.
The potential tax liabilities associated with transferring or selling assets.
The future cost of retaining the matrimonial home.
The effect of any proposed business disposal.
The timing of transactions and the availability of tax reliefs.
Existing Capital Gains Tax and Stamp Duty Land Tax rules relating to divorce also remain important and should be considered before any assets are transferred. Specialist accountancy advice should be sought.
How Ribet Myles Can Help
The financial consequences of divorce can be complicated, particularly where there are businesses, investment properties, significant savings or valuable family homes.
The Autumn Budget highlights the importance of understanding not only what assets are worth today, but also the income they may produce and the costs associated with retaining or disposing of them.
At Ribet Myles, we advise clients on the financial aspects of separation and divorce, including complex cases involving businesses, property and substantial assets. Where appropriate, we work alongside specialist tax and financial advisers to ensure that the implications of a proposed settlement are properly understood.
If you are considering separation or divorce, or are already negotiating a financial settlement, please contact Ribet Myles or call 020 7242 6000 to discuss your circumstances in confidence.
This article provides general information based on the Budget announcements of 28 October 2026. Some measures remain subject to consultation or legislation. It is not intended to constitute legal or tax advice.
Sources: HM Treasury Autumn Budget 2026 | HMRC Budget 2026 Tax Measures | Founders' Relief Consultation