Property and Other Taxes: Where Things Stand Ahead of Autumn Budget 2026
The Chancellor, John Healey, has confirmed the Autumn Budget will be held on Wednesday 28 October 2026.
While we can expect the usual pre-Budget speculation to build over the coming weeks, we separate the changes that are already known from what remains speculative or ruled out for now.
Confirmed Changes
Property Taxes
- Mansion tax. A High Value Council Tax Surcharge on English properties worth over £2 million was announced in the November 2025 Budget under the previous Chancellor, commonly referred to as a mansion tax. It takes effect from April 2028, collected alongside existing council tax bills, with annual charges ranging from £2,500 to £7,500 depending on property value.
- Landlords. Property income tax rates will rise from April 2027, affecting landlords regardless of what else happens on 28 October.
- Business rates. Burnham has announced a 20% reduction in business rates for pubs, clubs and music venues, with the threshold for smaller independent hospitality, leisure and retail businesses raised.
Inheritance Tax
- From April 2027, unused pension funds are due to fall within the scope of inheritance tax, which the Office for Budget Responsibility estimates will raise an extra £700 million in IHT between 2025/26 and 2030/31.
- This builds on what came into effect in April this year with Business and Agricultural Property Relief (BPR, APR) being tightened: qualifying assets keep full relief up to £2.5 million, but value above that threshold attracts only 50% relief, creating an effective 20% inheritance tax charge on family businesses and farms above that line.
- To find out more about what IHT changes could mean for you and your property, join our webinar on Thursday 13 August.
Speculation and Open Questions
Capital Gains Tax
- Prime Minister Andy Burnham has previously said he wants to look “in detail” at aligning CGT rates with income tax, having raised this at his Makerfield campaign launch in June, but this is an area of interest rather than a confirmed policy. Full alignment would be a significant departure from the status quo.
- Historically, the UK has consistently made it more tax-efficient to extract value as a capital gain than as income, and pure alignment would reverse that for the first time. Clients with plans to sell or liquidate a business, or otherwise realise gains, may want to discuss timing with us given the uncertainty, but we would caution against acting purely on speculation.
Wealth Tax, Land Value Tax, Stamp Duty and Council Taxes
- Mr Burnham has previously advocated wider reform of property taxation, including land value tax and alternatives to the current council tax and stamp duty land tax systems. However, this remains part of the longer-term debate. A broader wealth tax on very large estates has been described as “off the agenda for now.”
- The new Prime Minister has ruled out changing or scrapping stamp duty in this year’s Budget and has rejected reports that stamp duty and council tax will be replaced with a single annual property tax at this stage.
- However, he has criticised unfairness in the current council tax system, meaning more limited reforms to council tax bands, valuations or higher-value property taxes could still be considered. There have also been reports that the £2 million mansion tax threshold could be lowered to £1.5 million, but the Government has not confirmed this.
Further Inheritance Tax changes
- There has been speculation about a flat 10% tax on all estates to fund social care and a possible review of the April 2026 APR changes, but these have been highly speculative.
Income Tax
- No change to income tax rates has been signalled, and the manifesto pledge not to raise income tax for “working people” remains the government’s stated position. No indication has been given of a personal allowance increase being reinstated as a near-term commitment.
Your next steps
Several property and IHT changes are already law and should be factored into your planning now, such as the mansion tax from 2028, landlord tax rise from 2027, APR/BPR tightening from 2026/2027 and pension inheritance tax changes on the horizon in April 2027.
For everything else, please look out for more information on our website in the runup to, during and after the Autumn Budget.
In the meantime, for a conversation about how we can help you and your family with tax-efficient planning, get in touch with your usual BKL contact or Paul Barham using the form below.
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Frequently asked questions: UK tax situation ahead of Autumn Budget 2026
What tax changes should property owners and families prepare for before the Autumn Budget 2026?
Several important changes have already been announced and do not depend on what happens in the Autumn Budget. These include the new High Value Council Tax Surcharge (often referred to as the mansion tax) from April 2028, higher property income tax rates for landlords from April 2027, tighter inheritance tax reliefs for some business and agricultural assets, and inheritance tax applying to unused pension funds from April 2027.
Reviewing your position now can provide more planning options than waiting until tax changes take effect.
Will the Autumn Budget 2026 change inheritance tax?
No major inheritance tax (IHT) changes have been confirmed for the Budget itself. However, significant reforms are already scheduled, including the extension of inheritance tax to unused pension funds from April 2027 and restrictions to Business Property Relief and Agricultural Property Relief (BPR, APR).
Further inheritance tax changes remain speculative, so it is generally sensible to plan based on announced legislation rather than rumours or media reports.
How could inheritance tax changes affect family businesses and farms?
Family businesses and farms may face a higher inheritance tax burden where qualifying assets exceed available relief thresholds. While reliefs remain available, recent changes mean some assets that previously qualified for full protection may now be exposed to an effective inheritance tax charge.
Business owners and farming families should regularly review ownership structures, succession plans, wills and lifetime gifting strategies to understand the potential impact.
Can pension savings still be used as an inheritance tax planning tool?
Pensions may remain valuable for retirement and estate planning, but their inheritance tax treatment is becoming less favourable. From April 2027, unused pension funds are expected to fall within the scope of inheritance tax. As a result, individuals with substantial pension wealth may wish to revisit their estate plans and consider how pensions fit alongside other assets, trusts and succession objectives.
Should I bring forward the sale of my business because capital gains tax might increase?
Acting purely on Budget speculation is rarely advisable. However, if you are already considering a business sale, management buyout, share disposal or company liquidation, it may be worth reviewing your plans with an adviser. Potential changes to capital gains tax (CGT) could affect the net proceeds received by business owners, but no rate alignment with income tax has been confirmed.
What is the difference between capital gains tax and income tax?
- Income tax applies to earnings such as salaries, bonuses, rental profits and certain dividends
- Capital gains tax generally applies when an asset increases in value and is sold or transferred
The two taxes have historically been charged at different rates. Debate around aligning capital gains tax and income tax centres on whether gains and earnings should be taxed more similarly.
Could council tax bands be changed in future?
Potential reform of council tax remains a topic of political discussion. While the UK Government has ruled out some wider property tax changes for now, future reforms could include band adjustments, property revaluations or changes affecting higher-value homes.
Property owners should be aware that council tax reform can affect annual costs even where no property transaction occurs.
What happens if my property value rises above a tax threshold?
Crossing a threshold can affect your exposure to certain taxes and charges. For example, future property-based taxes may apply differently depending on a property’s valuation.
Property owners should ensure they understand how their home or investment property is valued and monitor developments that could affect higher-value residential property. Early planning can help avoid surprises when new rules take effect.
Are landlords likely to face higher taxes in the coming years?
Landlords already face a confirmed increase in property income tax rates from April 2027. Beyond that, landlords should continue monitoring Budget announcements, housing policy changes and compliance requirements. Tax planning for landlords increasingly involves more than income tax alone, including ownership structures, succession planning, capital gains tax exposure and inheritance tax considerations.
Is it better to wait until after the Budget before making tax planning decisions?
Not necessarily. Waiting can be sensible where a decision is entirely dependent on potential Budget announcements, but many tax changes discussed in the article are already confirmed. Where legislation has been enacted or implementation dates are known, reviewing your affairs now may provide more flexibility and time to act.
Professional advice can help distinguish between confirmed changes that require action and speculation that may never become policy.
Does a larger estate automatically mean inheritance tax will be due?
No. The value of an estate is only one factor in determining an inheritance tax liability. Reliefs, exemptions, spousal transfers, charitable gifts, business assets, agricultural assets and lifetime gifting can all affect the eventual tax position.
Because inheritance tax calculations can be complex, many families benefit from reviewing their circumstances well before wealth is passed to the next generation.
