This year’s Budget will take place on Wednesday 28 October 2026, when Chancellor John Healey delivers the first Budget of Andy Burnham’s government. With significant spending commitments already announced – but as yet little detail on how they will be funded – a lot of attention is turning to potential tax changes.
The Prime Minister has reaffirmed the Government’s resolve over earlier manifesto commitments not to increase taxes on “working people” (broadly understood to refer the headline rates of Income Tax, National Insurance or VAT).
This leaves relatively limited room for manoeuvre as far as tax increase go… So, what should taxpayers be watching?
Capital Gains Taxes
If the main revenue generating taxes are to remain untouched, capital gains tax (CGT) is likely to remain firmly in the spotlight.
Several prominent Labour politicians, including Wes Streeting and Lord Kinnock, have recently called for capital gains tax rates to be aligned with income, potentially increasing the top rate of CGT from 24% to 45%. Others have argued that key reliefs – including the CGT uplift on death – should be completely removed.
Whether or not these somewhat radical proposals win out, it’s unavoidable that several recent Budgets have seen CGT rates increase, while reliefs – such as business asset disposal relief (BADR) and on sales to Employee Ownership Trusts (EOTs) – have been significantly restricted.
Many economists argue that CGT rates represent a clumsy tool when it comes to increasing tax revenues – if the rates get too high, transactions may be delayed or even cancelled – but regardless, the political momentum is there.
In this context, further CGT increases remain a possibility.
Inheritance Tax
Inheritance taxes (IHT) is another area where tax changes could take place.
Recent years have seen some of the most substantial changes to the IHT regime in decades, as pensions became taxable, and Business Relief and Agricultural Property Relief – tax reliefs for trading and agricultural business owners, respectively – were significantly restricted.
The cumulative impact of these changes is significant, and many are still yet to fully reevaluate their estate planning in light of this.
Even so, there have been calls to introduce a flat or minimum 10% death tax – to help fund social care – across all estates, which could bring even greater complexity.
Property taxation
Property taxation is another area to watch, with discussion around a potential removal of SDLT and council taxes, to potentially be replaced with an annual property or land value tax.
It is often argued that SDLT represents a significant drag on the UK property market, tying up properties due to the significant cost associated with moving house. Similarly, council taxes are argued to be somewhat regressive as existing bandings bear little relation to property values, particularly in the context of regional variations.
Nonetheless, completely removing these taxes and replacing with an annual property tax represents a bold decision that would give significant winners and losers. Whether Andy Burnham is willing take such a significant risk so early into his premiership remains to be seen.
But it certainly can’t be ruled out.
What can you do to protect yourself before the Budget?
At Xeinadin, we advise our clients not to act on speculation. But do act with intent.
You shouldn’t undertake a transaction simply because you’re worried tax might increase. But if you are already planning to take steps that may be impacted by a potential tax change, now is the time to reconsider the timetable.
- Are you a business owner, considering an exit from the business – whether as an external sale, management buy out (MBO) or other transaction?
Where a transaction is already under consideration, we recommend giving careful consideration as to whether accelerating the timetables – with a view to securing current CGT rates and reliefs – may be advisable, providing you with greater certainty over the tax treatment.
- Have you been considering your estate or succession planning options?
If you are seriously considering measures to reduce your taxable estate – and benefit your broader family and/or other beneficiaries – helping save inheritance taxes, it may be advisable to ensure transactions are completed before the Budget. For example, gifting assets to beneficiaries or into trust could become more costly from 28 October onward.
- Are you in the process of buying a valuable property?
If you are considering buying a valuable property – and have some flexibility over timings – consider whether waiting until after the Budget could provide you with greater certainty over the transactional and future ownership costs.
The important distinction is simple: don’t create a transaction because of the Budget. Review the timing of one you already intend to make.
How can Xeinadin help?
If you fall within any of the three scenarios above – and want to consider the options available to protect against future tax increases – please speak with the Xeinadin tax team as early as possible. As your trusted advisor, we would be happy to you understand the current tax position, model the potential consequences and consider whether accelerating or delaying your plans may be appropriate.
And we’ll be with you when the Chancellor speaks.
What to expect from Xeinadin on Budget day
On 28 October, our specialists will analyse the announcements as they happen.
Look out for:
- Xeinadin’s Autumn Budget Summary Report
- Expert videos and reaction
- Tax and business analysis
- Practical guidance on what the changes mean for you
- Local post-Budget events
We’ll be watching developments in CGT, IHT, Business Relief, property taxation, business disposals and succession planning particularly closely.
Author: Adam Owens, Head of Tax Advisory UK North and Midlands.
