With less than a month to go until the Autumn Budget, Rathbones, one of the UK's leading wealth and asset management groups, is urging investors to review their finances as speculation around potential tax and pension changes intensifies.
Rumours of potential reforms to pensions, inheritance tax, capital gains tax and property taxation continue to dominate financial planning discussions, with uncertainty over how the Government may raise additional revenue prompting many people to reassess their finances ahead of the Chancellor's announcement.
Recent Rathbones research found that 58% of affluent UK adults rank changes to tax rules affecting their retirement income among their leading retirement concerns, while 49% say uncertainty around pension policy makes them anxious and leaves them needing additional support when making financial decisions.
Faye Church, Chartered Financial Planner and Head of Rathbones Guildford Office, said: "The conversations we're having with clients are increasingly less about finding loopholes and more about understanding how exposed they may be to future tax changes.
"Tax planning can improve long-term outcomes, but it should always support a wider financial strategy rather than dictate it. Ahead of the Budget, the focus should be on understanding potential vulnerabilities and ensuring existing plans remain fit for purpose."
Five tax checks to make ahead of the Budget
Faye Church says:
1. Unrealised capital gains
If you hold assets outside an ISA or pension that have risen significantly in value, consider whether crystallising gains at current CGT rates aligns with your long-term plans. Review opportunities to make use of both spouses' tax allowances and tax bands, particularly where assets can be transferred between partners before a disposal. Understanding your exposure before the Budget may help you make considered decisions rather than reacting to potential changes after the event.
2. Your pension position
While speculation around pension tax changes is far less intense than last year, anyone considering accessing their pension before the Budget should ask themselves a simple question: would this still be the right decision if there were no Budget at all?
If the answer is yes, there may be good reasons to proceed. If not, it is worth considering whether uncertainty is starting to drive the decision. If you have not yet taken your tax-free lump sum, review your options. If your pension forms part of your estate planning strategy, understand the implications of pensions being brought into the inheritance tax net from April 2027.
3. Your succession plan
If your estate planning strategy relies on reliefs such as Business Property Relief (BPR), Agricultural Property Relief (APR) or the current inheritance tax treatment of pensions, consider whether it remains robust in the face of further reform.
Review gifting plans, trusts, insurance arrangements and wealth-transfer strategies, and assess how your estate would be affected if existing reliefs became less generous. The best time to test a plan is before policy changes arrive, not after.
4. Your income position
If your income is close to a key tax threshold, such as the £100,000 threshold where the personal allowance begins to be withdrawn, review whether pension contributions, salary sacrifice arrangements or charitable giving could help reduce your taxable income and preserve valuable allowances.
Doing so may also help protect entitlement to government childcare support. Small adjustments can sometimes prevent a disproportionately large increase in tax, particularly for those approaching higher-rate, additional-rate or personal allowance taper thresholds.
5. Property held through corporate structures
Properties owned through corporate structures could come under greater scrutiny if the Government seeks to raise more revenue from wealth and property.
Owners should understand their exposure to changes in the Annual Tax on Enveloped Dwellings (ATED), Stamp Duty Land Tax (SDLT) surcharges and related property taxes. Reviewing these arrangements now may help avoid surprises should the Budget contain measures aimed at higher-value assets or corporate ownership structures.
