Autumn Budget 2026: Key Changes for Wealth, Tax and Legal Planning

On 28 October 2026, Chancellor John Healey delivered an early Autumn Budget, outlining a range of "everyday fixes to make life easier", alongside wider measures with implications for individuals and businesses.

Key announcements that may impact both you and your business.

• U-turn on the £12,000 Cash ISA limit for under-65s - The proposed Cash ISA limit on tax-free savings has been withdrawn, reverting to the current £20,000 annual ISA allowance across cash and investment ISAs.
   
• Reduction in Business Asset Disposal Relief - The Capital Gains Tax (CGT) lifetime limit for Business Asset Disposal Relief will be reduced from £1 million to £500,000 from 6 April 2027. This could increase your your CGT liability should you sell all or part of your business after 6 April 2027.
   
• Future changes to shareholder distributions - The Government announced that further changes to the way company distributions are paid to shareholders are expected from April 2028, with a consultation due to begin shortly.
   
• Increase in the National Minimum and National Living Wage
  From April 2027, the National Living Wage for workers aged 21 and over will increase by 3.9%, rising from £12.71 to £13.20 per hour. The minimum wage for 18 to 20 year olds will increase to £11.27 per hour, while the rate for 16 to 17 year olds and apprentices will increase to £8.31 per hour.
   
• Increase in Income Tax on Property and Savings Income
  The Government will increase income tax on property and savings income by a further 2% for basic (24%), higher (44%) and additional (49%) rate taxpayers. Effective from April 2027, this increase will impact investors who rely on rental income from property or interest generated from savings accounts.
   
• Income Tax Relief for State Pension Recipients
  Pensioners with income up to the value of the full New State Pension will not pay income tax. From April 2027, the full State Pension will increase to £13,036, taking those who rely solely on their State Pension above the current £12,570 personal allowance. The Chancellor has therefore announced a targeted tax allowance to ensure that those whose only income is the State Pension do not pay income tax.

Other Measures

• The 55p per mile rate for the first 10,000 business miles will be retained, while the rate for mileage above 10,000 miles will increase from 25p to 35p.
   
• Reform of the Self Assessment system from April 2029, making tax payments more frequent for those currently making payments on account.
   
• Introduction of Parental Pay for self-employed fathers and partners.
   
• The Trading Allowance will increase from £1,000 to £3,000 from April 2027. This allowance can be used against trading, casual or miscellaneous income, including sales through platforms such as Vinted and eBay.
   
• Introduction of a Starter ISA to encourage first-time investors. Further information and guidance are awaited.
   
• Introduction of a First-Time Buyer ISA to replace the Lifetime ISA, including a reduction in the penalty applied where a house purchase exceeds the allowable limit.
   
• Introduction of an Equity Loan Scheme for first-time buyers.
   
• Tax relief on pension contributions and tax-free cash allowances on pensions will remain unchanged.

While there were no significant Inheritance Tax changes announced in this Budget, the measures announced in the Autumn Budget 2024 remain at the forefront of planning considerations. These include restrictions to Agricultural Property Relief and Business Property Relief, which took effect in April 2026, and, significantly, the taxation of unspent pension pots from April 2027.

These measures, together with continued freezes to tax thresholds, are likely to increase the number of estates that fall within the scope of Inheritance Tax planning, and in some cases, Inheritance Tax Liability. 

What This Means for You

As always, effective wealth management and tax planning depend on staying ahead of legislative changes and adapting financial and estate planning strategies accordingly.

If you would like to discuss how these recent and forthcoming changes may affect your personal, business or succession planning arrangements, please contact Chattertons. Our legal, tax and financial experts work together to provide a joined up approach tailored to your individual circumstances.

Please contact your local office or complete our online enquiry form.