The Budget 2026: Looking Beyond the Speculation

On 28 October, John Healey will deliver his first Budget as Chancellor. The change of leadership at the Treasury has given the usual season of speculation more to work with than most. Yet following Andy Burnham’s Labour Party Conference speech last week, the more significant question may no longer be what appears in this year’s Budget. The Prime Minister used his first conference address to set out a broader vision for housing, pensions and social care, including proposals for a National Care Service and reforms to the pensions triple lock. Whether or not those proposals ultimately proceed in their current form, they point to a political environment in which the taxation of wealth, retirement assets and estates is likely to remain an active area of policy debate for years to come.

There are lists of what might change, warnings about what to act on before the date, and an understandable question from many of you about whether there is something you should already be doing. Our view is that the more valuable work happens well before any announcement. It lies in understanding your position clearly enough that no single statement, whichever way it falls, leaves you without options. Tax change carries real consequences, and our role is to make sure you are prepared for them in advance rather than responding once they land.

When we wrote in April (Link: The Exit Planning Has Changed), as the new tax year began, we set out how the changes to Business Asset Disposal Relief and Business Property Relief had reshaped exit planning for founders. We argued that the opportunity to build and pass on value remained intact, even as the standard of advice needed to capture it had risen. Six months on, those measures are firmly in force, and they sit alongside others that reach well beyond the point of exit: into how farms and family businesses pass between generations, how pensions are treated on death, and how international families hold UK assets.

This is a sensible moment to take stock of that wider picture, before attention in the coming weeks turns entirely to what is not yet known. The more useful question is not what to do before 28 October, but whether the way your wealth is currently structured still supports what you are trying to achieve.

Much of this is already settled. The £2.5 million allowance for 100% Business Property Relief and Agricultural Property Relief, which we examined in April from a founder’s perspective, applies equally to farming families, with a reduced effective inheritance tax rate of 20%, being 50% of the standard 40% inheritance tax rate, applying to qualifying assets above that threshold. The unused allowance is transferable between spouses and civil partners, meaning a couple can access up to £5 million of 100% relief on qualifying assets. Qualifying AIM shares now receive 50% relief in all circumstances.

That allowance, together with the nil-rate band of £325,000 and the residence nil-rate band of £175,000, remains frozen until April 2031, meaning its real value continues to erode rather than stand still. Less widely discussed is the change to incorporation relief. For transfers from 6 April 2026, relief must now be actively claimed through Self Assessment rather than applying automatically. HMRC has since clarified what a valid claim must contain, and an overlooked claim can produce a capital gains tax charge that meeting the conditions would once have prevented.

Personal representatives will also take on new responsibilities for reporting and paying the tax, including the ability to ask schemes to withhold up to half of a benefit for up to fifteen months while the position is settled. Retirement income and succession planning now need to be revisited together, because the pension decision and the estate decision have become the same decision.

That conclusion has been reinforced by recent political developments. The debate is no longer confined to how pensions are accumulated and drawn, but increasingly extends to the role they play within the wider system of retirement provision and social care funding. Regardless of individual views on the proposals announced at Labour Party Conference, they illustrate how retirement assets are becoming more closely linked to broader questions of intergenerational fairness and public spending. For families with significant pension wealth, further change can no longer be regarded as unlikely simply because a particular regime has existed for many years.

This is precisely where treating tax and investment planning as separate disciplines begins to fail. A change of this scale affects how much you draw during your lifetime, how liquid the wider estate needs to be to meet a future liability, and how succession should be structured so that no asset has to be sold under pressure. Advice on the pension in isolation, without sight of the wider portfolio, other assets and long-term income needs, produces a technically correct answer to the wrong question.

In April we made that case for business exits (link to previous article, here). The pension changes extend it to every family whose retirement savings and estate planning have so far been handled by different advisers.

More broadly, exposure on worldwide assets now turns on long-term residence, broadly UK tax residence in at least ten of the previous twenty tax years, and that exposure can continue for up to ten years after leaving. Non-UK pensions can sit outside UK inheritance tax for someone who is not long-term resident. A pension scheme established in the UK, however, remains within scope from 2027 wherever you live, subject to any relevant exemptions or reliefs.

Given how frequently the rules themselves are changing, we think the more durable aim is optionality rather than precision: not the perfect structure for today’s thresholds and rates, but one flexible enough to hold up reasonably well as those thresholds and rates continue to move. Families who over-optimise for the current rules often find they have the least room to adjust when the rules shift again, which recent years suggest they will continue to do.

The direction of travel is becoming clearer even if the detail is not. Governments of different political complexions face the same pressures: an ageing population, rising healthcare and social care costs, and public finances that leave limited room for easy solutions. The debate increasingly centres on how accumulated wealth, pension assets, property and business interests should contribute alongside income taxation. Precisely where future changes fall remains uncertain, but the likelihood of further change itself does not.

Tax should inform strategy; it should not dictate it. If you are managing wealth across businesses, investments, property, pensions, jurisdictions and generations, the task was never to predict this Budget correctly. It is to understand clearly where you stand against the changes already enacted, recognise the broader policy direction that is emerging, and maintain enough flexibility in how everything is structured to respond with judgement when the picture moves again.