Article last updated 4 September 2026.
Every autumn, the weeks leading up to the Budget bring a familiar mix of speculation and, if you know where to look, genuine planning opportunities. The rumours circulating ahead of Chancellor John Healey's Budget statement on 28 October 2026 are already gathering pace. Before you take any action, let us walk you through what we know, what we expect, and what you can do about it.
The 2026 Budget is unlikely to feature dramatic headline rate changes to the main rates of income tax, VAT, or National Insurance. Instead, expect targeted measures affecting wealth, assets, and investments – areas that matter most to people who have worked hard, built businesses, accumulated assets, and saved diligently into pensions.
At this stage there's no confirmation that any of the measures mentioned in this article will be announced in the Autumn Budget. This article is for information purposes only and doesn't constitute financial advice. Tax rules are subject to change and depend on individual circumstances. Please speak to a qualified financial planner before taking action.
When Labour took office, it made three headline pledges: no increases to the main rates of income tax, VAT or National Insurance. Those commitments are expected to remain intact, at least in their literal form. However, holding the line on rates isn’t the same as holding the line on your tax bill.
The Treasury’s headroom has narrowed considerably. Economists broadly agree that honouring all three pledges while meeting spending commitments on defence and welfare leaves the Treasury with difficult choices. The state pension triple lock, which guarantees the state pension's annual increase, adds further long-term spending pressure, making targeted measures on wealth, investments, pensions, and property the most likely revenue-raising options.
The short answer: A further increase in Capital Gains Tax (CGT) is one of the most credible areas of Budget speculation. If introduced, it could significantly increase the tax burden for investors, property owners, and business owners.
CGT is currently charged at 18% or 24% on most gains, including shares, funds, and residential property, depending on the taxpayer’s income tax band. One of the proposals being widely discussed would align CGT rates with income tax rates of 20%, 40%, or even 45% for some tax payers. UK-based research centre CenTax estimates a broader package of CGT reforms, including rate alignment, could raise around £14bn a year.
For a higher-rate taxpayer currently subject to 24% CGT, a move to 40% would represent a significant increase - broadly two-thirds higher than the current rate. The annual exempt amount is already down to £3,000, leaving very little shelter.
What you can do: If you have been considering selling assets that have accrued significant gains, it may be worth reviewing this with your financial planner before the budget. Bringing forward a disposal could allow you to crystallise gains at current tax rates should any future increase be announced.
The short answer: The CGT uplift at death resets inherited assets to their current market value, erasing a lifetime of capital gains. Some commentators have suggested this relief could be targeted, with its abolition raising an estimated £1.5bn–£2bn a year.
Under current rules, people inheriting shares, property, investments, collectibles or valuable assets receive them with a base cost reset to their value at the date of death. If this treatment were abolished, beneficiaries who later sell inherited assets could face CGT on gains stretching back potentially decades, in addition to any inheritance tax (IHT) already due.
For families with substantial property holdings, investment portfolios, or business assets that have appreciated significantly, such a change could have far-reaching implications for succession planning – making it a timely reminder to review lifetime gifting, trusts, and other wealth transfer structures.
The short answer: Speculation about changes to the pension tax-free lump sum has resurfaced ahead of the 2026 Budget. Currently capped at £268,275, any reduction would affect those approaching retirement with larger pension pots.
The ability to take 25% of your pension pot as a tax-free lump sum has been the subject of pre-Budget speculation for several years. Abolishing or reducing this entitlement could raise up to £2bn a year, though such a move would be deeply unpopular.
What you can do: If you’re approaching retirement and haven’t yet taken your tax-free cash, it may be worth having a conversation with your adviser. While nothing has been officially announced, understanding how any potential changes could affect your retirement income is a good reason to review your plans now.
The short answer: The nil-rate band remains frozen at £325,000, while unused pension assets will be brought within the IHT regime from 6 April 2027. But further tightening of business and agricultural reliefs is speculated.
The nil rate band, the amount you can leave free of IHT, has been frozen at £325,000 since 2009. The residence nil-rate band adds a further £175,000 for those passing a family home to direct descendants, but the overall framework hasn’t kept pace with property price inflation, particularly in many parts of the South East.
Speculation centres on whether there will be further tightening of business property relief and agricultural property relief. Separately, the Finance Act 2026 has already stipulated that most unused pension assets will be brought within the IHT net from 6 April 2027. For many families, pensions have long been one of the most tax-efficient ways to pass wealth to future generations. If your estate planning relies heavily on this, it’s worth reviewing your plan to ensure it remains aligned with your wishes.
The short answer: Income tax thresholds are currently frozen until 5 April 2031. As earnings rise, more people are drawn into higher tax bands without any increase in headline rates, a process known as fiscal drag.
As wages rise, whether through annual pay reviews, promotions, or inflation-linked increases, more people are pulled into higher tax bands, a mechanism sometimes called 'fiscal drag', or less charitably, a 'stealth tax'. Speculation ahead of this Budget centres on whether further structural changes to thresholds could follow.
If your income is close to a key threshold, particularly the £50,270 boundary between basic and higher rate, or the £100,000 point at which the personal allowance begins to taper, beware. A pay increase, bonus payment, or receipt of investment income could push you into a significantly higher effective tax rate, with no change in the headline numbers. Salary sacrifice, pension contributions, and charitable giving can all help reduce taxable income and mitigate the effects of fiscal drag.
The short answer: Two targeted property tax measures are attracting attention ahead of the Budget: a potential increase in the Annual Tax on Enveloped Dwellings (ATED) and the closure of a Stamp Duty Land Tax (SDLT) loophole involving commercial property held through corporate structures.
ATED is an annual charge on UK residential property valued at more than £500,000 held within certain corporate or collective investment structures. An increase in the charge has been suggested as a possible revenue-raising measure. Separately, the government may seek to tighten SDLT rules for commercial property held through companies.
If you hold property through a company, partnership or other corporate structure or are involved in commercial property transactions, it may be worth reviewing those arrangements with your tax adviser before the Budget.
The short answer: Probably not in the immediate term, but the political appetite is growing and becoming harder to ignore.
A 2% annual levy on assets over £10m has been backed by a number of Labour MPs and campaigners. Estimates of its revenue-raising potential vary considerably, from £24bn to near zero, and it faces significant Cabinet opposition. Even so, the debate increasingly centres on how accumulated wealth should be taxed, rather than whether tax rates on income should rise.
Read our 2025 report on whether a wealth tax could work in the UK and what could happen instead.
The honest answer: Don't make hasty decisions based on speculation. But do use the time available wisely.
Here are the five things you might want to review with your financial planner before 28 October 2026:
1. Unrealised capital gains
Consider whether selling assets that have grown in value, and crystallising gains at current CGT rates, makes sense for holdings outside a tax-efficient wrapper such as an ISA or pension. Make full use of both spouses’ tax allowances and tax bands where applicable.
2. Your pension position
If you haven’t taken your tax-free lump sum, understand your options. If your pension is central to your estate planning strategy, model what happens when it’s brought within the IHT net from April 2027.
3. Your estate plan
If your strategy relies on reliefs under threat, such as business property relief, agricultural property relief, or the current inheritance tax treatment of pension assets, explore whether alternative planning options should be considered.
4. Your income position
If your income is close to a tax threshold, consider whether pension contributions, salary sacrifice, or charitable giving could help improve your tax efficiency.
5. Any property held in corporate structures
Understand the implications of Ated or stamp duty changes before they arrive.
If you'd like to talk through any of these areas, please get in touch with our team. We're here to help you navigate whatever comes next, calmly, clearly, and with your long-term interests at the centre of everything we do.
The best Budget planning is rarely about reacting to announcements. More often, it’s about ensuring you’re well prepared before they happen.
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This material is for information only and does not constitute advice. Tax depends on individual circumstances and legislation and HMRC practice may change. Clients should take personal advice (and tax/legal advice where relevant) before acting. Investments and tax advantaged investments can fall as well as rise and may be illiquid; eligibility and relief depend on meeting conditions.
