Autumn Budget 2026: Are Tax Rises on the Horizon?

With Andy Burnham having become Prime Minister in July, all eyes will be on his Government's first Autumn Budget on 28 October 2026.

The Government has some expensive commitments. Alongside continued pressure on public finances, increased defence spending and the proposed National Care Service will all need to be paid for. At the same time, the Government has maintained its commitment not to increase the main rates of Income Tax, VAT or employee National Insurance.

So, where will the Chancellor find the money?

Attention is inevitably turning towards taxes on wealth, property, capital gains and inheritance. Nothing is certain until Budget Day, but there are several areas which could be particularly relevant to our clients.

Capital Gains Tax: Could rates rise further?

Capital Gains Tax (CGT) is likely to be one of the taxes receiving plenty of attention ahead of the Budget, with reform already featuring in pre-Budget discussion.

One possibility is a further increase in CGT rates, potentially bringing them closer to Income Tax rates. If rates were increased significantly, perhaps towards 40% for higher-rate taxpayers, could this be accompanied by some form of inflationary relief, similar to the old indexation rules? Alternatively, could the Government increase the relatively modest £3,000 Annual Exempt Amount?

Another important area to watch is the CGT uplift on death. Currently, when an individual dies, assets are generally rebased to their market value at the date of death for CGT purposes. Removing or restricting this uplift could raise additional tax, but would have significant implications for estates holding assets which have appreciated over many years, particularly farms, land and property.

For farming families, there is also the interaction between CGT and the recent changes to Inheritance Tax. Many families have made, or are considering making, lifetime gifts as part of their succession planning. This raises the question of whether the Government could look again at Gift Hold-Over Relief, which can allow CGT arising on certain lifetime gifts to be deferred.

Stamp Duty Land Tax: Will the Government risk rocking the property market?

There are always calls for reform of Stamp Duty Land Tax (SDLT), but significant changes can have an immediate effect on property transactions.

The Government may therefore be reluctant to make wholesale changes which risk unsettling an already sensitive property market.

One area that could potentially be targeted instead is the higher rate applying to additional residential properties. Increasing the surcharge on second homes and investment properties could raise additional revenue without changing SDLT rates for ordinary homebuyers.

Whether the Chancellor chooses to interfere with property taxation remains to be seen, but anyone considering a property transaction will want to listen carefully on Budget Day.

Inheritance Tax: Will the Government reopen the debate?

Inheritance Tax remains particularly relevant to farmers and family businesses.

The changes to Agricultural Property Relief (APR) and Business Property Relief (BPR) have now taken effect. Following a late concession, the first £2.5 million of combined qualifying agricultural and business property per individual can qualify for 100% relief, with 50% relief applying above this level.

Farming organisations continue to lobby the Government over these changes. However, the debate appears to have become quieter in recent months. The question now is whether the new Government will be prepared to reopen what has already proved to be a difficult issue, or whether it will leave the new regime to settle.

There could, however, be changes elsewhere within IHT.

One possibility being discussed is whether the seven-year period for Potentially Exempt Transfers (PETs) could be extended to ten years. Such a change would make early succession planning even more important, although there is currently no confirmed proposal to do so.

Deeds of Variation

Another area worth watching is Deeds of Variation.

Under the current rules, beneficiaries can generally rearrange an inheritance within two years of a death, with the variation capable of being treated for IHT and CGT purposes as though the deceased had made the revised disposition.

Could the Government reduce the two-year window or even remove the favourable tax treatment of Deeds of Variation altogether?

For families already considering varying a Will following a death, this is one area where it may be sensible to review the position before the Budget rather than waiting until the end of the existing two-year period.

Trusts: Could exit charges increase?

Trust taxation could also come under scrutiny. Under the relevant property regime, trusts can currently face IHT charges of up to 6% at each ten-year anniversary, with proportionate charges potentially arising when assets leave the trust.

Could the maximum rate be increased, perhaps from 6% to 10%?

Such a change would significantly alter the cost of holding wealth within trusts. Where trustees and beneficiaries are already considering bringing a trust to an end or distributing assets, the possibility of tax changes adds another factor to consider when deciding on timing.

However, exiting a trust can itself trigger Inheritance Tax and Capital Gains Tax consequences, so action should not be taken purely because of Budget speculation.

What should you do before the Budget?

Nobody should make a major financial decision purely because of Budget speculation. However, where a transaction is already planned, it may be worth considering whether there is any benefit in completing it before 28 October.

This could include selling a property or other asset, making a lifetime gift, distributing assets from a trust or completing a Deed of Variation.

We don't yet know what will change. What we do know is that with considerable pressure on the public finances, the Chancellor will need to balance raising revenue with avoiding damage to investment and the wider economy.

This article is based on the tax rules and Budget speculation at the time of writing. Potential changes referred to above are not confirmed Government policy unless specifically stated, and no action should be taken solely on the basis of Budget speculation.