The Chancellor of the Exchequer, John Healey, delivered his first Budget today against a backdrop of continued pressure on households, businesses and the public finances. The measures combine short-term support with incentives aimed at longer-term economic growth. At the time of writing, both Gilt yields and the Pound appear steady, suggesting a relatively strong vote of confidence in the UK’s fiscal and political credibility.
The draft’s headline position is that the main rates of Income Tax (excluding property and savings income which will increase), National Insurance and VAT remain unchanged. Revenue-raising measures include changes to savings and property income tax and a reduction in the Business Asset Disposal Relief (BADR) lifetime limit, alongside announced incentives for qualifying founders, significant early investors and employee share ownership.
For private clients and business-owning families, this is a Budget of targeted changes rather than wholesale reform. The key is to understand which measures affect you, when they take effect and whether your existing plans need to change. That is where we are here to help.
What remains unchanged
The draft states that the main Capital Gains Tax (CGT) rates, overall ISA subscription limit, pension annual allowance and pension tax-free cash remain unchanged, and that the Corporation Tax headline rate remains capped at 25%, with full expensing retained. Previously announced Inheritance Tax (IHT) changes affecting pensions and Business and Agricultural Relief remain important for estate and succession planning. For deaths on or after 6 April 2027, most unused pension funds and pension death benefits will form part of the estate for IHT purposes, subject to exclusions.
The headline changes
| Area | What you need to know | When it takes effect |
|---|---|---|
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Savings income
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Announced rates are 24%, 44% and 49%, applying UK-wide from 6 April 2027, subject to legislation. These replace the 22%, 42% and 47% rates announced in 2025 for the same start date. Review cash held outside tax-efficient accounts.
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6 April 2027
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Property income
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Announced rates are 24%, 44% and 49% from 6 April 2027 for England, Wales and Northern Ireland, subject to legislation. Scotland has devolved rate-setting powers: do not assume these rates apply to Scottish taxpayers.
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6 April 2027
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Cash ISAs
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The planned reduction is reversed, leaving the cash ISA limit at £20,000.
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6 April 2027
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First-time buyers
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For first-time purchases above £450,000, the Lifetime ISA (LISA) withdrawal charge falls from 25% to 20%. A new First Time Buyer ISA will replace the LISA for new savers.
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LISA charge: 29 October 2026. New ISA: 6 April 2029.
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Business disposals
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A reduction in the Business Asset Disposal Relief (BADR) lifetime limit is announced. The draft gives a reduction from £1 million to £500,000. Review the implications before planning a sale.
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6 April 2027
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Founders’ Relief
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Announced 10% CGT relief on up to £10 million of qualifying lifetime gains for founders and significant early investors in high-growth, innovative UK companies. Subject to final eligibility rules and legislation; interaction with BADR and Investors’ Relief limits must be checked.
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Qualifying disposals from 6 April 2027; subject to legislation
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Pension death benefits
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Removal of the pensions tax two-year rule is listed among the Budget measures. This is separate from the IHT changes affecting pensions.
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28 October 2026
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A Budget for business owners and founders?
Alongside Founders’ Relief, the announced EMI2 employee share-option changes increase the individual tax-advantaged option limit to £120,000 and extend the exercise period to 15 years from 6 April 2027.
Family companies should also keep succession plans under review. The draft gives 6 April 2028 as the start date for changes to company distribution rules and forecasts £800 million of revenue in 2029/30. The intended protection for genuine commercial transactions, including family successions, also requires confirmation. The detailed legislation will matter for anyone reorganising a company or taking money out of it.
The draft states that the main-rate first-year allowance rises to 50% for expenditure from 1 January 2027, while the main writing-down allowance falls to 12% from April. Separately, the British Business Bank’s Growth Guarantee Scheme expansion, announced in July 2026, is intended to unlock £6.5 billion of additional market lending over four years.
Other changes that may affect you
Investments – The Government has consulted on mitigating double taxation for UK-resident individual members of US limited liability companies (LLCs). A new Securities Transfer Tax is planned to replace Stamp Duty and Stamp Duty Reserve Tax on securities in 2027.
Homes – The High Value Council Tax Surcharge remains due from 1 April 2028, with provisions for deferrals, discounts and exemptions. This applies to England, not Scotland. Alongside the ISA changes outlined above, the new Your First Home equity-loan scheme is intended to support around 70,000 first-time buyers from April 2027.
State Pension – Under plans announced before this Budget, the Triple Lock is to be adjusted from April 2030. The announced formula retains inflation protection and a 2.5% floor, alongside a mechanism intended to maintain the State Pension’s value relative to earnings over time.
So, what should I be thinking about?
Look beyond the headlines and focus on what the changes mean for your longer-term plans. For business owners, the proposed Founders’ Relief and reduction in the Business Asset Disposal Relief lifetime limit need to be considered together: eligibility and the interaction between reliefs will matter more than the headline figures alone. Before bringing forward a sale or changing your business structure, review the detail with your trusted advisers, including the implications for family succession.
For savers and property owners, review how changes to the taxation of your income could affect your plans and spending needs. Available ISA capacity, spouse or civil-partner allowances and other suitable tax-efficient arrangements may help, but any changes should fit your wider circumstances. Changes to property ownership require particular care, taking account of CGT, Stamp Duty Land Tax (SDLT) or Scotland’s Land and Buildings Transaction Tax (LBTT), as well as borrowing and succession.
Investors holding US LLCs or similar entities should review their arrangements as the proposed double-taxation reforms develop. Estate and pension planning should remain part of that wider review, including the previously announced pension IHT change for deaths on or after 6 April 2027, subject to exclusions.
The central takeaway is that effective tax planning is a long-term process, not simply a response to Budget day: keep your arrangements under review as the detail develops, with your own objectives at the heart of each decision.
