The chancellor, John Healey, has delivered the 2026 Autumn Budget. It included wide-ranging changes that will affect people of every age and from all walks of life.
Healey upheld many of Rachel Reeves’ commitments, including a pledge not to increase taxes on “working people” and a commitment to meeting the Labour Party’s self-imposed fiscal rules.
This briefing focuses on the announcements most relevant to your personal wealth, business interests and family’s financial future. We distinguish new measures from previously announced changes and proposals where the detailed rules are still being developed.
At a glance: the key points for your wealth
Your estate — previously announced: most unused pension funds and pension death benefits are due to fall within Inheritance Tax from 6 April 2027.
Your income — new announcement: further increases in tax on rental income and savings interest are announced from 6 April 2027.
Your business — proposed relief and a reduced limit: Founders’ Relief is proposed for qualifying disposals from 6 April 2027, with eligibility under consultation. The Business Asset Disposal Relief (BADR) lifetime limit is announced to fall to £500,000 on the same date.
Your savings and family — announced changes: the planned Cash Individual Savings Account (ISA) limit reduction is reversed; first-time buyer savings and housing measures may also be relevant to the next generation.
The impact depends on your circumstances. An announcement is not the same as an available entitlement, and proposed measures may change as legislation and detailed rules develop.
Inheritance tax and pensions: implications for your estate
The previously announced inclusion of most unused pension funds and pension death benefits within the scope of Inheritance Tax (IHT) will proceed from 6 April 2027. This is confirmation of an existing plan rather than a new Budget measure, but it deserves particular attention when considering the wealth you intend to leave to your family.
The IHT nil-rate bands also remain frozen until 2031. An unchanged headline tax rate does not mean an unchanged potential liability: frozen allowances remain relevant to the proportion of an estate that may be exposed to tax.
Why this matters: the relevant question is how these changes affect your existing plans for providing for your family. Their implications should be considered in the context of your wider financial plan, rather than in isolation.
Property and savings income: what changes for investors and landlords
Rental income. The Budget announces a further two-percentage-point increase in tax on taxable property income in England, Wales and Northern Ireland from 6 April 2027, in addition to the increase already scheduled for that date. Scottish property income is not covered by these rates.
Savings interest. The further increase also applies to taxable savings interest across the United Kingdom (UK). The Personal Savings Allowance remains £1,000 for basic-rate taxpayers and £500 for higher-rate taxpayers; additional-rate taxpayers have no allowance. Interest within an ISA remains tax-free.
The table compares the announced rates with the 20%, 40% and 45% baseline. The total increase is four percentage points: two previously announced and a further two in this Budget.
Tax band | Baseline rate | Previously scheduled from 6 April 2027 | Announced rate from 6 April 2027 |
Basic | 20% | 22% | 24% |
Higher | 40% | 42% | 44% |
Additional | 45% | 47% | 49% |
Why this matters: if rental income or taxable interest contributes to your spending, the relevant issue is the effect on your net income. The position depends on your tax band, available allowances and where the income arises.
Business owners: selling your business and extracting profits
For business owners, the most significant announcements concern the tax treatment of a future sale and payments to shareholders. The proposed new relief should be read alongside its eligibility caveats, rather than as a general reduction in tax on business sales.
Business disposals: proposed relief and a lower Business Asset Disposal Relief (BADR) limit
The Budget announces proposed Founders’ Relief, offering a 10% Capital Gains Tax (CGT) rate on qualifying share disposals from 6 April 2027, subject to a £10 million lifetime limit. Detailed eligibility rules remain under consultation.
The proposal targets founders and significant early investors in high-growth, innovative UK companies. Potential conditions include employee numbers, turnover, growth and research and development. It should not be assumed to apply to every owner-managed business.
Separately, the lifetime limit on gains qualifying for Business Asset Disposal Relief (BADR) is announced to fall from £1 million to £500,000 from 6 April 2027. BADR and proposed Founders’ Relief are distinct: neither eligibility nor the ability to combine reliefs should be assumed.
Payments to shareholders
The government also plans to reform the taxation of payments from companies to individual shareholders, reducing opportunities to extract profits at more favourable tax rates. The implications will depend on the detailed rules and commencement provisions.
Why this matters: if you are considering a sale or changes to how you receive income from your company, eligibility and commencement rules matter more than a headline rate. Discuss the position with your advisers before changing existing arrangements.
ISAs and tax-efficient saving
The Budget reverses the planned reduction in the annual Cash ISA contribution limit for under-65s from £20,000 to £12,000 from 6 April 2027. Up to £20,000 can therefore continue to be allocated to Cash ISAs within the £20,000 overall annual ISA allowance—not in addition to it.
The government will also investigate introducing a new ISA to reward first-time investors. This remains an exploratory proposal rather than an available product. First-time buyer ISA and Lifetime ISA changes are covered in the family section below.
Why this matters: the announcement preserves flexibility over how you use your ISA allowance. The appropriate balance between cash and investments remains a matter for your own objectives and circumstances.
What has not changed—and why it still matters
For 2027/28, the main rates of Dividend Tax, IHT, CGT, National Insurance and standard-rate Value Added Tax (VAT) remain unchanged. Corporation Tax is unchanged except for banks. The main Income Tax rates are also unchanged, apart from the property and savings income measures described above.
The Personal Allowance remains £12,570, with Income Tax thresholds frozen until 2031. Frozen thresholds can increase the amount of income exposed to tax even when headline rates do not rise. The separate implications of frozen IHT allowances are covered in the estate-planning section.
Helping children and the next generation
The first-time buyer announcements may be relevant to family members seeking to purchase a home. The individual eligibility conditions remain important, including property limits and, for the equity-loan scheme, household income limits.
First-Time Buyer ISA and Lifetime ISA changes
A First-Time Buyer ISA is planned to replace the Lifetime ISA (LISA) for new savers from April 2029. It would allow contributions of up to £4,000 a year with a 25% government bonus on the balance withdrawn for a qualifying first-home purchase up to £450,000, with no upper age restriction and no withdrawal charge.
Existing LISA holders would be able to continue contributing. For purchases above £450,000 meeting the other first-home conditions, the withdrawal charge would fall from 25% to 20%; other unauthorised withdrawals would retain the 25% charge.
Your First Home scheme
The planned Your First Home scheme would offer eligible buyers of qualifying new-build homes in England a 20% government equity loan, interest-free for five years, with a minimum 2.5% deposit. Household income limits and local property price caps apply. Applications are expected from February 2027 and first purchases from April 2027.
Why this matters: these measures may be relevant when discussing support for children or grandchildren, but access depends on the buyer’s circumstances and the final scheme rules.
Other business and retirement updates
State Pension
The full new State Pension is announced to rise by 3.9% from April 2027 to approximately £250.70 a week. A Pension Tax Allowance is planned from 6 April 2027 to April 2030 for pensioners whose total income does not exceed the full new State Pension; this should not be read as a general tax exemption for pension income. The previously announced triple-lock reform from April 2030 would retain an uplift based on the highest of Consumer Prices Index (CPI) inflation, 2.5% or the amount needed to maintain value relative to earnings.
Business costs and administration
Employment costs and mileage. The National Minimum Wage and National Living Wage are announced to rise by 3.9% from April 2027. The car and van mileage rate for the first 10,000 qualifying business miles rises to 55p from 6 April 2026; the rate above 10,000 miles rises from 25p to 35p from 6 April 2027.
Business rates. From April 2027, qualifying retail, hospitality and leisure properties in England with a rateable value of up to £18,000 will qualify for full Small Business Rates Relief, up from £12,000. Tapered relief will extend to £21,000, up from £15,000.
Tax administration. From April 2029, Self-Assessment taxpayers making payments on account are due to move to smaller, more regular payments towards their tax bill.
His Majesty’s Revenue and Customs (HMRC) debt recovery: new powers from July 2029
From July 2029, HMRC will gain powers to recover lower-value tax debts through regular instalments directly from the bank accounts of individuals and companies who can afford to pay but repeatedly fail to do so. Safeguards will be developed before the powers are introduced.
The wider economic picture
The Office for Budget Responsibility forecasts gross domestic product (GDP) growth of 1.2% in 2026 and 1% in 2027. Higher costs and interest rates continue to affect households, businesses and the public finances. This provides context for the announcements, rather than a reason on its own to change a long-term financial plan.
What this means for your financial plan
The relevance of these measures depends on your circumstances and objectives. If the estate-planning, investment-income or business-owner announcements affect you, please speak to your adviser about their implications for your existing financial plan. Proposals with eligibility rules still under consultation should not be treated as confirmed entitlements, and no arrangement should be changed on the strength of a headline alone.
Important information
Source: His Majesty’s Treasury’s Budget 2026 document and supporting publications, published 28 October 2026.
This briefing provides general information only and does not constitute personal financial, tax or legal advice. It does not take account of your individual circumstances. Tax treatment depends on individual circumstances and may change; proposals remain subject to legislation and final rules.
While we believe this interpretation to be correct, it cannot be guaranteed, and we cannot accept responsibility for action taken or not taken because of this summary. Please obtain appropriate professional advice before entering a new arrangement or changing an existing one.
