Autumn Budget 2026: what to expect beyond the headlines

By Martin Adams, Partner and Head of Tax, and Tim Lynch, Partner and Head of Private Client

With increases to the main rates of income tax, employee National Insurance and VAT ruled out, the government will need to look elsewhere for revenue. As the shift towards taxing wealth gathers pace, the pressure is increasingly falling on the moments when assets change hands.

The real Budget starts when the Chancellor sits down

Martin Adams, Partner and Head of Tax

At roughly 12:30pm on 28 October 2026, the Chancellor of the Exchequer, John Healey, will rise to present his inaugural Budget. We expect a well-trodden narrative: pledges on growth and fairness, sober warnings about tough fiscal choices and almost certainly a closing ‘rabbit out of the hat’ to grab the headlines.

The speech provides the overview; the supporting material determines the tax outcome. Those supporting documents are published shortly after he sits down.

In a world increasingly driven by headlines, it is easy to focus on the speech announcements, but it is the supporting detail that determines who pays the tax, how much they pay and when the change takes effect.

The speech provides the overview; the supporting material determines the tax outcome.

What to expect

The Chancellor is materially constrained by the government’s commitment not to increase the main rates of income tax, employee National Insurance or VAT.

Together, these taxes account for just under 60% of total government receipts.

The Chancellor is therefore between a rock and a hard place with his options to create material additional tax revenues.

The main areas of speculation for tax policy change are familiar, and recurring: further changes to capital gains tax, restrictions to inheritance tax or pension reliefs, property-related measures, sector-specific levies and an extension of stealth taxes through frozen thresholds.

Each is capable of raising revenue without increasing the main rates of the ‘big three’ taxes.

Tax policy often distinguishes between productive economic activity and passive wealth ownership.

The government has generally sought to encourage investment, entrepreneurship and business growth, while recent reforms have increasingly focused on taxing capital, wealth and passive returns.

Could we see further measures that preserve or enhance incentives for trading businesses and/or workers while increasing the tax burden on passive investment activities?

I think it is likely that we will see some form of property tax reform, with council tax reform representing the most plausible area for change. Whilst recent commentary indicates that council tax is unlikely to be abolished in the near term, further reform of the existing regime remains a realistic prospect.

Timing matters

It has become increasingly common for significant tax changes to take effect from Budget Day itself, particularly in relation to capital gains tax.

This creates an annual panic to complete material transactions, such as business sales, before Budget Day. That is far from ideal from a commercial or tax-planning perspective, but it is the reality of the modern world.

We always urge caution with respect to undertaking transactions only for tax reasons. Tax should always be considered, but only as one aspect of the overall decision-making process.

Having said this, if a transaction is happening anyway, we typically advise that completing the transaction prior to the Budget provides certainty of your position and therefore is normally recommended from a tax perspective.

A word for the West Midlands

The regional agenda also merits attention. The government is pursuing greater devolution and local decision-making as part of its growth strategy.

For West Midlands businesses, the practical questions are which functions and funding streams are actually devolved, how consistently the arrangements and accountability requirements operate across regions, and whether the additional flexibility and funding certainty support investment and growth without creating disproportionate administrative complexity.

Before the Chancellor rises

The wrong response to Budget speculation is to take irreversible action without a clear commercial rationale.

Any actions requiring a third party are now unlikely to be an option with the Budget only a few weeks away, unless the transaction is already in progress. There may, however, be opportunities to undertake internal or family transactions to secure the known current tax rates.

The areas attracting the greatest speculation all have something in common: they affect the points at which businesses, assets and wealth change hands. Below, Tim Lynch considers what possible changes to capital gains tax, inheritance tax, pensions and lifetime gifting could mean for business owners and families, and the practical steps worth taking before Budget Day.

It is not what you earn. It is what you pass on.

Tim Lynch, Partner and Head of Private Client

The focus of tax policy is increasingly shifting towards the transfer of wealth. With increases to income tax, National Insurance and VAT ruled out by the 2024 Manifesto, attention is turning to the points at which assets change hands.

The shift towards taxing wealth is already underway. The question is how much further it has to run.

These are not everyday events. They are some of the most significant financial decisions people ever make. The conversations I am having with clients this autumn are less about this year’s tax bill and more about what happens to everything they have built. Increasingly, they are concerned about the prospect of tax on tax, with the same wealth potentially facing more than one tax charge as it passes between generations.

Tax influences behaviour. Changes to the taxation of business sales, pensions and lifetime gifting have the potential to affect investment decisions, succession planning and the timing of wealth transfers across the economy.

For businesses, these decisions go beyond tax planning. The way profits, investment and eventual exits are taxed influences whether entrepreneurs choose to expand, reinvest or realise the value they have created. Tax policy therefore shapes not only family wealth, but also business confidence and long-term investment across the wider economy.

Four moments

Most of the wealth tax measures currently under discussion can be distilled into four moments: selling, gifting, pensions and death.

Selling is the most obvious. Capital gains tax rates rose to 18% and 24% in October 2024, while Business Asset Disposal Relief now offers only a fraction of the benefit previously available under Entrepreneurs’ Relief.

For many business owners, the reward for years of risk-taking, investment and job creation is already taxed more heavily than it was a few years ago. Any further increase would fall squarely on those planning an exit and funding retirement.

Death is the moment I would watch most closely. Assets are currently rebased for capital gains tax on death, meaning gains built up over a lifetime are effectively wiped out. If that relief were removed, the same wealth could face inheritance tax on death and capital gains tax when later sold, fundamentally changing estate planning.

Pensions are already changing. From April 2027, most unused pension funds will count towards an estate for inheritance tax purposes. A fund that once passed largely outside the inheritance tax net could therefore face inheritance tax on death and income tax when beneficiaries access it.

Giving is also under scrutiny. The inheritance tax system has long encouraged lifetime gifting through the seven-year rule and the exemption for gifts out of surplus income.

As the UK enters the largest intergenerational transfer of wealth in its history, these rules allow families to help children and grandchildren when support is most valuable. Unlike an inheritance, lifetime gifts allow donors to see the benefit of their wealth first-hand.

Not only the very wealthy

This is not just an issue for the very wealthy. Frozen inheritance tax thresholds, rising asset values and the inclusion of pensions from April 2027 mean many families with a home, pension savings and assets accumulated over a lifetime may find themselves within the inheritance tax net without ever considering themselves wealthy.

Business owners face an even sharper challenge as restrictions to business and agricultural property relief continue to reshape succession planning.

What to do before 28 October

None of this calls for panic, and I would caution strongly against rushing into gifts or disposals on the strength of speculation. Decisions made in haste before a Budget have a habit of being regretted after it. But there is a good deal that can sensibly be done now, and most of it is simply good housekeeping.

Make sure your will reflects your current wishes and your current assets. Check who you have nominated to receive your pension, because after April 2027 that choice carries inheritance tax consequences it did not have before. If you own a business, know what it is worth and how much of its value would qualify for relief under today’s rules. And if you are considering a sale or a significant gift, understand the numbers under the current regime and the likely alternatives, so that you are ready to act quickly and deliberately once the detail is known.

In my experience, the families and business owners who fare best after a Budget are rarely the ones who guessed the measures correctly. They are the ones who had already done the groundwork, and could respond calmly to whatever the Chancellor decided.

The next decade may be defined not by how wealth is created, but by how it is transferred.

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With the Autumn Budget approaching, now is a good time to review your position and understand the options available to you.

If you're considering a business sale, planning for the future of your wealth or reviewing your family's inheritance tax position, our tax team can help you understand the potential implications and plan your next steps.

Contact our tax team to discuss how the Budget could affect you.

Martin Adams and Tim Lynch’s articles were first published in the October 2026 edition of Birmingham Business.

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

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