UK Autumn Budget 2026 Predictions: Capital Gains Tax, Inheritance Tax & What to Expect on 28 October

UK Autumn Budget 2026 Predictions: Capital Gains Tax, Inheritance Tax & What to Expect on 28 October

Chancellor John Healey delivers the UK's Autumn Budget on 28 October 2026 — the first under Prime Minister Andy Burnham. With the government's fiscal headroom shrinking and borrowing costs rising, speculation is intense about where new tax revenue will come from. Here's a clear breakdown of what's confirmed, what's being speculated, and what you might want to consider before Budget Day.

When Is the Budget, and Why Does It Matter This Year?

The date was formally confirmed by Chancellor Healey on 31 July 2026: the Autumn Budget will be delivered on Wednesday, 28 October 2026. This is the first major fiscal statement under the Burnham government, and it comes at a tight moment — estimates suggest the Chancellor's fiscal headroom could fall from roughly £26 billion at the Spring Statement to around £13.8 billion, while public borrowing remains higher than forecast. That combination is why so much of the speculation centers on tax rises rather than spending increases.

What's Already Been Ruled Out

The government has repeatedly committed not to raise the headline rates of three major taxes:

• Income Tax — main rates are protected under the government's "taxes on working people" commitment.
• Employee National Insurance — also covered by the same commitment.
• VAT — the standard rate is not expected to change.

This matters because it narrows down where new revenue could realistically come from — and most analysts agree it points toward taxes on assets, wealth, and capital rather than income or consumption.

Capital Gains Tax: The Area Getting the Most Attention

Capital Gains Tax (CGT) is widely seen as the most likely target, for a simple reason: it isn't covered by the government's "working people" tax pledge, giving the Chancellor room to act without breaking a manifesto commitment. Several specific changes are under discussion:

• Aligning CGT rates with Income Tax rates. The main CGT rate was last increased from 20% to 24% in October 2024. Some within the governing party have pushed to bring it fully in line with income tax bands, though Treasury modelling reportedly suggests steep increases could actually reduce total revenue, since owners tend to simply hold onto assets rather than sell and trigger a large tax bill.
• Removing the CGT tax-free uplift on death. Currently, when someone dies, their beneficiaries inherit assets "rebased" to market value at the date of death — effectively wiping out any capital gains built up during the deceased's lifetime. Removing this uplift could expose inherited assets to CGT on decades of accumulated gains, layered on top of any Inheritance Tax already due.
• Reducing or removing the CGT annual exempt amount (currently £3,000 per individual).
• Changes to Business Asset Disposal Relief (BADR). This relief, formerly "Entrepreneurs' Relief," already saw its lower rate rise from 10% to 18% in April 2026, matching the current lower main CGT rate. Further changes could remove that lower rate entirely (taxing BADR gains at the full 24%) or cut the £1 million lifetime limit on qualifying gains further.

Any CGT changes would typically take effect from the new tax year (6 April 2027), but changes applying immediately from Budget Day itself aren't unprecedented — which is why some advisers are recommending clients consider crystallising gains before 28 October rather than waiting.

Inheritance Tax and Property

Inheritance Tax reliefs — particularly the 2024 changes affecting farmers and family businesses — remain under scrutiny and could see further adjustment. On property taxation specifically, a full overhaul (such as replacing stamp duty and council tax with a single annual property tax) has been ruled out for this Budget, though targeted measures aren't off the table. A council tax surcharge on properties valued at £2 million or more, already announced in the November 2025 Budget, is set to begin from April 2028.

Business Rates and Employer Changes

The government has promised wider business rates reform, including changes to Small Business Rates Relief, with further detail expected on Budget Day. For employers, updates are anticipated on Pay As You Earn Settlement Agreements, holiday pay enforcement rules, and possibly further changes to the mandatory payrolling of benefits in kind (a phased rollout that begins with the 2027/28 tax year). A new mileage-based charging system for electric vehicles, delivered through an updated Vehicle Excise Duty, is also expected — aimed at recovering revenue lost as fuel duty income falls with EV adoption.

What Individuals and Business Owners Are Doing Now

With so much of the speculation centered on CGT and inherited assets, financial advisers are commonly discussing a few pre-Budget planning strategies with clients:

1. Reviewing unrealised gains on assets held outside tax-efficient wrappers like ISAs or pensions, and considering whether crystallising gains now — at current rates — makes sense before any announced increase.
2. Making full use of both spouses' allowances and tax bands where applicable, before any rule changes take effect.
3. Reviewing estate and succession plans if significant unrealised gains would pass through inheritance, given the CGT death-uplift is one of the more discussed changes.
4. Avoiding decisions based purely on speculation. Every source covering this Budget stresses the same point: nothing is confirmed until Healey actually delivers the statement, and pre-empting unconfirmed changes carries its own risk.

Key Takeaways

• The Autumn Budget 2026 will be delivered on 28 October 2026 by Chancellor John Healey.
• Income Tax, employee National Insurance, and VAT main rates are protected and not expected to rise.
• Capital Gains Tax is the single most-watched area, with speculation covering rate alignment with income tax, the death uplift, the annual exempt amount, and BADR.
• A full property tax overhaul isn't expected this year, though the £2m+ council tax surcharge (announced separately) starts April 2028.
• Business rates reform and payrolling of benefits in kind changes are also expected to feature.
• Nothing is confirmed until Budget Day — treat all of the above as informed speculation, not settled policy.

Budget speculation season is a good moment to step back and look at how different countries are reshaping their tax systems in 2026 more broadly — from Germany's e-invoicing mandate to Canada's overhauled GST/HST credit. You can find more country-by-country coverage like this on Quinet Calc's blog.

This article is for general informational purposes and reflects speculation and reporting as of September 2026. Nothing here is confirmed policy until the Chancellor delivers the Budget on 28 October 2026 — consult a UK-qualified financial adviser or tax professional before making any decisions based on these predictions.