Autumn Budget 2026: What Might Change, and Should You Act Now?

The Chancellor, John Healey, will deliver the Autumn Budget on Wednesday 28 October 2026. The government has again committed not to raise the rates of income tax, employee National Insurance or VAT. Corporation tax is also capped at 25%.

With those taxes off the table and not much fiscal headroom left, most commentators expect the Treasury to look elsewhere for revenue. That means taxes on wealth, property and savings. As usual, the weeks before the Budget are full of rumours.

Below, We've summarised the changes most commonly tipped by advisers and the financial press. We've also given our view on whether it's worth acting before Budget day. None of these measures are confirmed, and some won't happen.

1. Capital gains tax: the front runner

Many commentators see capital gains tax (CGT) as the most likely target this year. At the moment, gains are taxed at 18% for basic rate taxpayers and 24% for higher and additional rate taxpayers. The annual exempt amount is £3,000.

The main rumours are:

• Aligning CGT rates with income tax rates (20%, 40% and 45%). This could happen in one go or be phased in over several years.

• Removing the uplift on death. At present, assets passed on at death are revalued to market value for CGT, so any gain built up during the owner's lifetime is never taxed. Estimates put the cost of this relief at around £1.5bn–£2bn a year.

• Cutting back Business Asset Disposal Relief (BADR). The rate has already risen to 18%, and the £1m lifetime limit could be reduced further.

There's a catch. Treasury modelling has suggested that sharp CGT rises can reduce revenue, because people simply hold on to their assets. That makes a modest increase, or one that starts later, more likely than a dramatic one.

2. Property: the "mansion tax" and holiday lets

The High Value Council Tax Surcharge (the "mansion tax") is due to start in April 2028. It will apply to homes in England worth over £2m, with an annual charge of between £2,500 and £7,500. There's speculation that the threshold could come down to £1.5m. That would roughly double the number of homes affected, from around 134,000 to around 300,000.

The other property measure being talked about is reclassifying short-term holiday lets as second homes for council tax. This would take them out of business rates, where many currently qualify for small business rates relief, and could significantly increase their running costs.

A full overhaul of stamp duty and council tax, such as a land value tax, is widely seen as unlikely this time. It would need a nationwide revaluation first.

3. Inheritance tax and pensions: probably quieter this year

Inheritance tax (IHT) has already had a lot of change. The reforms to agricultural and business property relief took effect in April 2026, and unused pension funds will come into the IHT net from April 2027. Because of that, most commentators don't expect another major overhaul this year.

That said, a few ideas are doing the rounds:

• A flat-rate charge on assets held at death (10% has been suggested) to help fund social care. This would need big changes to the gifting rules, so it's more likely to be a longer-term idea than an October announcement.

• Limits on lifetime gifts. These were heavily trailed before last year's Budget but didn't happen.

• Cuts to pension tax-free cash or higher rate relief. This rumour comes up almost every year. Last year's salary sacrifice announcement caused a backlash, so ministers may be wary of touching pensions again. That announcement was the £2,000 cap on National Insurance-free salary sacrifice from April 2029.

4. Thresholds, savings and businesses

Fiscal drag continues. The personal allowance (£12,570) and the higher rate threshold (£50,270) are already frozen until April 2031. When pay rises, more people are pulled into higher tax bands. This is a quiet tax rise that doesn't break any manifesto promise, so expect the freeze to stay.

ISAs. The cash ISA limit falls to £12,000 for under-65s from April 2027, and there's no sign of the government backing down. There has also been talk of capping the total value a person can hold in ISAs. Separately, a new first-time buyer ISA is expected to replace the Lifetime ISA.

Businesses. There may be some good news for smaller businesses:

• The small business rates relief threshold could rise from £12,000 to around £17,000.

• Rates relief for hospitality could be extended to cafes and hairdressers.

• The VAT registration threshold could go up from £90,000 to £100,000.

Motoring. A 3p fuel duty rise is scheduled for 1 January 2027. Every planned rise since 2011 has been cancelled or delayed, so this one may be too.

Should you act before 28 October?

Our short answer: act if you were going to do it anyway, but don't let a rumour make the decision for you. Budget changes can take effect immediately. In October 2024, the CGT rate rises applied from Budget day itself. So if you're planning something, the window is before 28 October, not after it.

Worth considering now

• Sales you were already planning. If you intend to sell shares, a second property or a business in the near future, bringing the sale forward could lock in today's CGT rates. For CGT, the date of disposal is usually the date contracts are exchanged, not the date of completion.

• Using your £3,000 CGT annual exempt amount. Realise gains up to the allowance each year, for example through "Bed and ISA" or by selling to your spouse or civil partner, who can then use their own allowance.

• Pension contributions. Relief is currently available at your highest rate of income tax. Contributions can also bring income back below the £100,000 threshold where your personal allowance starts to be withdrawn.

• Gifts. Gifts to individuals fall outside your estate for IHT if you survive seven years. Regular gifts can qualify for the normal expenditure out of income exemption straight away (see my earlier post on this). Starting a gifting plan now does no harm, whatever the Budget brings.

• ISA allowances. Use this year's £20,000 allowance, especially if you save mainly in cash and will be affected by the lower limit from 2027.

Think twice before

• Selling assets you'd otherwise keep, just to beat a rate rise that may never happen. You'd pay tax now that you might never have paid at all, and on death, the uplift could currently wipe out the gain entirely.

• Taking your pension tax-free lump sum early. Many people did this before the 2024 Budget and later regretted it when nothing changed. Once the money is out of the pension, you usually can't put it back.

• Rushed gifts or trusts that leave you short of income or capital later on.

The bottom line

Capital gains tax and property are the areas to watch on 28 October. Inheritance tax and pensions look less likely to change this year, and income tax, employee National Insurance and VAT rates are off the table. The best pre-Budget planning is usually the planning you'd do anyway: use your allowances, time any sales you were already planning, and avoid irreversible decisions based on speculation.

If you're thinking about selling an asset, making a large gift or taking money from your pension, it's worth talking it through before Budget day.

This article is general information based on press speculation as at 5 October 2026 and isn't personal tax advice. Please take advice before acting.