Autumn Budget 2026: are we moving towards higher taxes on wealth?

By Tim Lynch, Private Client Tax Partner

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Britain has a new Prime Minister, a new Chancellor, and an Autumn Budget scheduled for 28 October 2026. For anyone with significant personal wealth, a business, or assets to pass on, the key question is how far the tax landscape may shift.

Nobody knows the detail yet. The new government has inherited tight public finances, existing fiscal rules, and a mandate focused more on stability and cost-of-living relief than on a detailed tax programme. Even so, the direction of travel has been signalled clearly enough to warrant attention.

What has actually been said?

The new Prime Minister has spoken about the UK over-taxing work and under-taxing assets. That phrase tells you where the centre of gravity lies. Some earlier speculation focused on moving capital gains tax rates closer to income tax rates, although that discussion appears to have quietened. The more important private client question may now be whether the CGT uplift on death survives, particularly if further revenue is needed to fund social care.

None of this is policy, and none of it has been legislated or formally proposed. But it should not be dismissed as noise. It is consistent with the changes already made over the past two years:

• BPR and APR caps. The combined £2.5 million allowance for 100% relief took effect in April 2026, with 50% relief above that threshold.
• Pensions entering the IHT estate. From April 2027, unused defined contribution pension pots will be brought within the scope of IHT.
• CGT rate increases. The main rates rose to 18% and 24% in October 2024. The BADR rate climbed to 18% from April 2026.
• Threshold freezes extended to 2031. The personal allowance, higher rate threshold, IHT nil-rate band, and residence nil-rate band are all frozen, pulling more people into higher tax bands and more estates into the IHT net every year.

Each of these was presented as a standalone measure. Taken together, they amount to a sustained repricing of what it costs to hold, grow, and pass on personal wealth in this country.

Why the CGT uplift on death matters more than it sounds

For private clients, the headline rate of CGT may be less important than the question of whether gains continue to be wiped out on death.

Under the current rules, assets are rebased to market value on death for CGT purposes, so gains built up during lifetime are wiped out. The beneficiary inherits the asset at its current value and CGT only applies to any later increase. This is not a loophole; it is a longstanding feature of the tax system and one around which families have planned for decades.

If the uplift were removed, beneficiaries would inherit the original acquisition cost. A family home bought for £150,000 and now worth £650,000 would carry a latent £500,000 gain from the moment it was inherited. A sale could then trigger a CGT bill at current rates of well over £100,000, on top of any inheritance tax due.

The concern is not that removing the uplift would be inherently unreasonable; there are serious arguments on both sides. The concern is how it would interact with existing IHT changes to create a compounding burden many families have not planned for. Most clients still think about inheritance tax and capital gains tax separately. If the uplift goes, they become the same problem, applied to the same assets, at the same moment.

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"Most people are still thinking about inheritance tax and capital gains tax as separate problems. They are not. If the uplift goes, they become the same problem, applied to the same assets, at the same moment."

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The frozen threshold effect

Frozen thresholds are easy to overlook because nothing visibly changes. The personal allowance remains at £12,570, the higher rate threshold at £50,270, and the IHT nil-rate band at £325,000, where it has been since 2009. But as wages, property prices and investment values rise, more people are pulled into higher tax bands and more estates fall within the IHT net. Property remains an obvious area of focus because it is visible, valuable and difficult to move.

The Prime Minister briefly raised the possibility of unfreezing the personal allowance, but that appears to have been set aside, at least for now, on grounds of fiscal discipline. The cost would run into billions, leaving little room under the fiscal rules. The result is that the stealth effect continues: higher earners, business owners and those with estates above the nil-rate band are already paying more in real terms without a headline rate increase.

For higher earners, the interaction with the £100,000 taper is particularly important. It creates an effective 60% marginal rate between £100,000 and £125,140. That band has not moved either and is expected to remain in place until at least 2031, increasing the squeeze on business owners, landlords and others with variable income.

What should you actually do?

In moments like this, there is a temptation either to do nothing or to rush into planning based on speculation. The sensible approach before the Autumn Budget is to understand where you stand now.

• Review your will. If your will was drafted before April 2026, it was written in a world where business property relief was unlimited and pensions sat outside the IHT estate.
• Know your capital gains exposure. If you hold assets with large unrealised gains, consider whether crystallising some gains now, at current rates, would be sensible before any rate increase or removal of the uplift. This is not a recommendation to sell. It is a recommendation to understand your exposure so that, if the rules change, you are making an informed decision.
• Look at your gifting strategy. The seven-year rule for potentially exempt transfers has not changed, although future reform cannot be ruled out. Gifts out of surplus income remain one of the most effective and underused IHT exemptions. If you have been meaning to start a regular gifting programme, doing so before the Budget may be worth considering, given the direction of travel towards tightening the taxation of personal wealth.
• Pension planning. If pension funds have been treated as outside the estate, or used as part of wider succession planning, that strategy should now be reviewed. The combined impact of IHT and income tax could materially change the outcome.
• Revisit the BPR position. The £2.5 million cap on 100% relief, with 50% relief above that threshold, is now in force. For business owners whose companies are worth significantly more than £2.5 million, the interaction between the BPR cap, the potential loss of the CGT uplift, and the existing IHT liability creates a planning challenge that did not exist two years ago. The transferability of unused BPR allowance between spouses, confirmed at the November 2025 Budget, is helpful but does not solve the underlying problem for larger estates.

The case for acting before, not after

Recent Budgets have shown that significant tax measures can take effect quickly, and sometimes immediately.

The point is not to predict the Budget. It is to ensure that, whatever is announced, you have reviewed your position, understood your exposure, and made the decisions within your control. With a new government, a new Chancellor, and limited fiscal headroom, the conditions are there for significant change. Whether it comes in the Autumn Budget or is deferred to a later fiscal event, the planning window is now.

If you are unsure where you stand or would like to talk through how the current signals might affect your position, our private client team can help you review your arrangements and consider the options available before the Budget arrives.

This article has been prepared for information purposes only. Formal professional advice is strongly recommended before making decisions on the topics discussed in this release. No responsibility for any loss to any person acting, or not acting, as a result of this release can be accepted by us, or any person affiliated with us.

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