Following Chancellor John Healey’s Autumn Budget announcement on 28 October 2026, a number of tax and succession planning changes have been confirmed, alongside several new reliefs affecting individuals and business owners.
While the Budget introduces fewer headline-grabbing changes than in recent years, it contains a number of measures that could have important implications for personal tax planning, estate administration and investment decisions in future.
Below is a summary of the key legal and tax developments individuals should be aware of.
Capital Gains Tax (CGT)
- The lifetime limit for Business Asset Disposal Relief (BADR) will be reduced from £1 million to £500,000 for BADR qualifying disposals made from April 2027. The Government has indicated that 3 in 4 claimants are unlikely to be affected.
- A new Capital Gains Tax (CGT) relief for company founders will be introduced from April 2027. A consultation is seeking views on the practical application of the relief until 30 November 2026.
- The new Founders’ Relief will provide a reduced CGT rate of 10% on qualifying disposals made after April 2027, subject to a lifetime limit of £10 million. The relief is described as recognising founders and early investors. To qualify, individuals will generally need to:
- Have held 25% of the company’s ordinary share capital since the trade commenced
- Have owned their shares or securities for at least five years
- Have been a UK resident for at least five continuous tax years before the disposal.
The company will also need to demonstrate growth and innovation by satisfying at least two of three tests relating to turnover, headcount and qualifying innovation expenditure.
Inheritance Tax (IHT)
- The Government has addressed concerns raised about how the reduced rate of Inheritance Tax for charitable legacies will operate once pension assets are brought within the scope of Inheritance Tax from April 2027. Personal representatives will be able to choose whether pension property is included within the general estate or treated separately when assessing eligibility for the reduced rate where a portion of the estate or pension is left to charity.
- Wills which leave a share of an estate to charity should be reviewed in light of these changes. However, the new flexibility should allow personal representatives to compare both approaches when considering whether an estate qualifies for the reduced rate of Inheritance tax.
- The Government has introduced new anti-avoidance provisions following a recent court decision involving so-called “double trust” arrangements. These changes will take effect from 28 October 2026. When calculating IHT on trusts, anti-avoidance rules will be strengthened so that a liability cannot reduce an IHT charge where the debt was effectively funded using assets that originally belonged to the beneficiary whose estate is being taxed.
- Following the announcement in the spring that thousands of estates would be affected by a National Savings & Investments tracing error, the Government has confirmed that a full IHT exemption will be introduced for affected holders. Income tax relief will also be available for personal representatives in respect of interest accrued before death or during the administration period. This ensures estates are not disadvantaged as a result of the tracing issue.
Income Tax
- From April 2027, for taxpayers across the UK income tax rates on savings income will increase by 2%, in addition to the increase of 2% announced in the 2025 Budget. The savings basic rate will increase to 24%, the savings higher rate to 44%, and the savings additional rate to 49%.
- Income tax rates applying to property income in England and Wales will also increase by 2% from April 2027. Similarly to savings rates, this doubles the previous increase announced in the 2025 Budget. This will result in rates of property basic rate at 24%, the property higher rate at 44%, and the property additional rate at 49%. The position in Scotland remains to be determined given devolved taxation powers.
- No changes have been announced to income tax on dividends and employment income.
- A temporary Pension Tax allowance will be introduced for the next three tax years to prevent individuals whose sole income is the State Pension from having to pay income tax, where their pension exceeds the Income Tax annual allowance.
Pensions & Investments
- The current requirement for pension and lump sum death benefits to be paid within two years of death will be removed. As a result, tax-free payments will no longer become taxable solely due to being paid more than 2 years after a death.
- Changes will also be introduced where an individual dies before age 75 having exceeded their lump sum and death benefit allowance. A tax charge will be imposed on the beneficiaries in respect of the excess, at each beneficiary’s marginal rate of Income Tax in the year the lump sum is paid.
- The Government has reversed the reduction in the Cash ISA allowance announced in the 2025 Budget. The existing annual limit of £20,000 will be retained from April 2027.
- Ministers have committed to exploring a new ISA incentive for first-time Stocks and Shares ISA investors.
- A new First Time Buyer ISA will be introduced from April 2029, replacing the existing Lifetime ISA. From 29 October 2026, the withdrawal charge applying to existing Lifetime ISAs for properties above the cap will be reduced from 25% to 20%, meaning savers will no longer lose part of their own contributions and growth when purchasing a house over the cap.
Looking Ahead
Many of the Budget measures will not take effect until 2027 or later, providing individuals and families with time to review their affairs and consider whether any planning opportunities arise before the new rules come into force.
If you would like to discuss how these changes may affect your personal tax, succession or investment planning, please contact a member of our Private Client team.
