October 2026 Budget: A steady hand rather than sweeping reform

Private Clients expecting a radical reset will not find it in this year’s October Budget. The Chancellor has largely maintained the current direction, with targeted adjustments scheduled mostly for the next tax year and beyond. The message is one of incremental change and administrative tidying, rather than wholesale reform of personal taxes, wealth planning, or property. Some of the key points for individuals, families, trustees and business owners are set out below.

Inheritance tax and trusts

The Government will clarify how liabilities connected with trust property may reduce asset values for inheritance tax. The intention is to align the treatment of liabilities affecting trust property with the approach to personal liabilities and to tighten anti-avoidance rules. These changes will apply immediately to deaths and other chargeable events on or after 28 October 2026. For trustees and settlors, this is a prompt to review existing financing arrangements secured on trust assets, including intra‑group and related‑party debt. Structures that rely on debt deductions to manage periodic or exit charges should be revisitedany changes .

Income tax: Property and savings

From 6 April 2027, all income tax rates applied to property income will rise by two percentage points across England, Wales and Northern Ireland. The property basic rate will be 24%, the higher rate 44%, and the additional rate 49%.

Similarly, from 6 April 2027, savings income tax rates will increase by two percentage points across the UK to 24% (basic), 44% (higher) and 49% (additional).

Investors should factor these rate rises into cash flow and distribution planning.

Capital gains tax: Trusts migration and business relief

For internationally mobile families and trustees, administrative changes to the CGT “exit charge” that arises when a trust ceases to be UK resident will be introduced. This is intended to make relocations to the UK more straightforward for the globally mobile.

Pensions, savings and ISAs

There are no headline structural changes to pensions or ISA allowances in this Budget. However, with savings income rates set to rise from April 2027, the relative value of tax‑sheltered wrappers becomes more pronounced. Clients may wish to engage with their financial advisers and look at how they can maximise available allowances and revisit portfolio placement across taxable and tax‑advantaged accounts ahead of the new rates taking effect. If you do not have a financial adviser already, we can refer you to advisers whom we work with who would be happy to assist.

What this means for private clients

The Budget is evolutionary, not revolutionary. The increases to income tax on property and savings from April 2027 will marginally raise the tax burden on landlords and investors. Trusts face tighter IHT rules on liabilities from late October 2026, warranting a pre‑emptive review of funding and security arrangements. International families may benefit from a more manageable CGT exit charge process when trustees migrate.

Beware the elephant in the room – pension changes in 2027

From 6 April 2027, pensions, including pension death benefits, will be brought within the taxable estate for inheritance tax purposes. Although first announced in a previous Budget, this remains the single greatest alteration to inheritance tax legislation for many years. In practice, clients should review beneficiary nominations and expressions of wish to ensure they still reflect current intentions, consider how pension death benefits will interact with wills and any existing trusts, revisit liquidity planning to meet potential inheritance tax liabilities, and reassess any planning assumptions that relied on pensions falling outside the taxable estate. Advice should be taken now, well before the start date, to allow for any necessary restructuring. We can put you in touch with a financial adviser who specialises in pensions work if you wish to review this and do not currently have an adviser of your own.