The Government may have promised not to raise the main taxes on working people, but that does not mean your pension, property, investments, business or estate are protected from change.
Prime Minister Andy Burnham has refused to rule out tax rises, saying the UK is in a “challenging position”. Chancellor John Healey will deliver his first Budget on 28 October 2026, giving taxpayers a limited window to review transactions already under consideration, as reported by ITV News and confirmed by HM Treasury.
(Reading Time: Approx. 6 minutes)
Topics Discussed:
- The taxes, reliefs and allowances that could come under pressure in the Autumn Budget.
- Sensible tax planning to consider before 28 October without acting purely on speculation.
Capital Gains Tax could be an obvious target
For 2026/27, individuals generally pay Capital Gains Tax at 18% to the extent gains fall within the unused basic-rate band and 24% above it. The annual exempt amount is £3,000, while trustees and personal representatives generally pay 24%, as per HMRC.
Capital gains can therefore be taxed at materially lower rates than employment income. IG has highlighted this difference, while warning that higher CGT rates can discourage disposals because taxpayers may hold assets for longer.
A £500,000 gain taxed at 24% produces a £120,000 liability before allowances and deductible costs. At 40%, it would be £200,000 and at 45% it would be £225,000. Those higher CGT rates are not announced Government policy, but the comparison shows why anyone already considering a substantial disposal should review the timing, with the current rate confirmed by HMRC.
Planning could include using the £3,000 annual exemption, available capital losses and statutory reliefs. Any action should remain commercially sensible even if Budget predictions prove wrong, with HMRC confirming that losses and applicable reliefs can reduce taxable gains.
Business owners should review BADR
Business Asset Disposal Relief currently taxes qualifying gains at 18% for disposals from 6 April 2026 and is subject to a £1 million lifetime limit. Detailed eligibility conditions apply, as per HMRC.
On a qualifying £1 million gain, an 18% rate produces CGT of £180,000. At 24%, the bill would be £240,000, an additional £60,000. No increase has been announced, although abolition of BADR has been identified as one potential revenue-raising option, according to the IFS.
Anyone already preparing for a company sale, retirement or succession should check whether the relief is available before the Budget. Share rights, trading status and ownership periods can all affect entitlement, so the relief should be reviewed before agreeing the timing of a disposal.
Pension tax-free cash is another area to watch
Most individuals can currently take up to 25% of pension benefits as tax-free cash, subject to the standard Lump Sum Allowance of £268,275. Valid protections may provide a higher allowance.
There is no Government proposal to reduce the allowance to £100,000. The IFS has previously used a £100,000 cap as an example of possible reform. The figure should therefore be treated as an illustration rather than announced policy, according to the IFS.
If £268,275 were hypothetically reduced to £100,000, £168,275 of potential tax-free capacity would disappear. If that amount were later taxed at 40%, the additional Income Tax could be approximately £67,310, using the current HMRC allowance and the IFS example.
That does not mean pension money should automatically be withdrawn. Money inside a pension benefit from tax-advantaged investment growth. From 6 April 2027, most unused pension funds and pension death benefits will also be brought within the value of an estate for Inheritance Tax purposes, as confirmed by HMRC.
The withdrawal method matters too. A pension commencement lump sum does not itself trigger the Money Purchase Annual Allowance, while an uncrystallised funds pension lump sum can trigger it. This is particularly relevant for people who intend to keep contributing, according to HMRC.
Investment and property income is already changing
For 2026/27, dividend income is taxed at 10.75% at the ordinary rate, 35.75% at the upper rate and 39.35% at the additional rate. The dividend allowance currently remains at £500.
From April 2027, savings income rates will become 22%, 42% and 47%. Separate property income rates of 22%, 42% and 47% will apply in England, Wales and Northern Ireland, with residential finance cost relief at the 22% property basic rate, as confirmed by HMRC.
Company owners may want to review genuine dividends, pension contributions and remuneration. Landlords should consider ownership, financing and planned disposals. Incorporating or transferring property is not automatically tax-efficient because CGT, SDLT and other costs can arise.
Property and wealth remain in focus
A High Value Council Tax Surcharge is already scheduled to apply in England from April 2028. Owners of residential properties worth more than £2 million will face annual charges starting at £2,500 and rising to £7,500 for properties above £5 million, in addition to ordinary Council Tax, as confirmed by HM Treasury.
A broader annual wealth tax has not been announced. The IFS has warned that annual wealth taxes can create practical problems involving valuations, liquidity and behavioural responses, including incentives for highly mobile taxpayers to leave the UK, according to the IFS.
Targeted changes to existing taxes may therefore be easier to introduce than an entirely new wealth tax.
Corporation Tax and fiscal drag
Corporation Tax currently has a 19% small profits rate for companies with profits of £50,000 or less, marginal relief between £50,000 and £250,000, and a 25% main rate above £250,000. The thresholds are reduced according to the number of associated companies.
Company owners should consider whether every company within a structure remains commercially necessary, particularly where associated companies reduce the available thresholds.
Frozen personal tax thresholds are another important consideration. The Personal Allowance is £12,570 and the basic-rate limit is £37,700, with these amounts scheduled to remain frozen until 5 April 2031. The higher-rate threshold will therefore remain £50,270, as confirmed by HMRC.
As incomes rise while thresholds remain fixed, more taxpayers can be brought into tax or pushed into higher bands. This fiscal drag can increase Government revenues without increasing headline rates.
Summary
The Autumn Budget may contain several targeted measures rather than one dramatic tax increase. CGT, BADR, pension allowances, property taxation and investment income all deserve attention, but predictions remain predictions until 28 October.
The answer is not to rush into artificial or commercially damaging transactions. However, if a business sale, property disposal, dividend, pension withdrawal, lifetime gift, succession plan or company restructure is already being considered, it makes sense to review the tax consequences now.
If you have significant business interests, investments, property, pensions or family wealth, get in touch with Tax Expert for a pre-Budget tax-planning consultation session.
Fill out our form here, email us at info@taxexpert.co.uk, or message us on our WhatsApp for out of office hours.
Kind regards,
Ilyas Patel
