Autumn Budget 2026 – the impact on private individuals

The Budget on Wednesday 28 October comes against a difficult economic and fiscal backdrop, and the chancellor made it clear that he had wanted an early budget to avoid damaging speculation about tax changes. Despite this, and considering recent Budgets, there had been plenty of it, particularly how change might impact individuals’ tax positions. Happily, this turned out to be a quiet budget with few major announcements that impact individuals. 

Capital Gains Tax  

Business Asset Disposal Relief (BADR) formerly known as Entrepreneur’s Relief, will be capped at £500,000, down from £1 million, from 6 April 2027. This means those who meet the conditions of BADR who sell shares after 5 April 2027 will pay the lower 18% rate of capital gains tax on the first £500,000, but 24% on the balance. So, for those who qualify, selling or gifting before 6 April 2027 could save as much as £30,000.   

At one point BADR allowed individuals to pay only 10% on the first £10 million, but it has been diluted substantially over time. However, whilst the chancellor took with one hand he gave with the other, with the announcement of a new founders relief. Those that qualify will benefit from a 10% rate on the first £10 million. No legislation is yet available, but it will apply to those who held 25% or more of the shares when a business commenced trading, provided they have held them for five years and been a UK tax resident for five consecutive years at the point of disposal. Furthermore, the business will have had to prove that it has met two of three further conditions: a turnover of more than £10 million, employed more than 15 people and/or invested over £1.5 million in research and development. 

Income Tax 

The Autumn Budget brought a mixed picture for savers, investors and property owners, combining higher taxes on certain forms of income with some welcome changes to ISAs. 

From 6 April 2027, property and savings income will be subject to Income Tax rates 2% higher, bringing the basic, higher and additional rates to 24%, 44%, and 49% respectively. 

For ISA savers, however, the Government has stepped back from its planned reduction in the Cash ISA allowance. The allowance will remain at £20,000, rather than being reduced to £12,000 from April 2027. 

First-time buyers will also see changes. A new First Time Buyer ISA is due to be introduced from 6 April 2029, replacing the Lifetime ISA (LISA) for new savers. Until then, the existing LISA rules are being made more flexible. From 29 October 2026, a first-time buyer purchasing a property above the current £450,000 limit will pay a 20% withdrawal charge instead of 25%, allowing them, in effect, to recover their original contributions while giving up the Government bonus.

Other provisions 

Despite speculation, the Chancellor did not announce any increase to the headline rates of CGT and the £2 million threshold for the so-called ‘Mansion Tax’ remains unchanged and will not be lowered to £1.5 million.  

There were also no notable new announcements relating to Inheritance Tax. 

A footnote in the main Budget document announced an intention to reform the taxation of company distributions.  As it states that capital treatment will be preserved where there is a genuine change in ownership, including where a family business is passed to the next generation, the inference is they intend to widen the application of income tax to company distributions on company reorganisations. The reforms are, however, not due to take effect until April 2028. 

The Budget also flagged the introduction of measures to enable wealthy taxpayers to meet their tax obligations and the potential increased scope of powers for HMRC to ensure tax compliance is enforced among such individuals and businesses.

How we can help 

We know that business and personal life often go hand in hand. Whilst this Budget did not introduce many significant changes impacting individuals, our experienced team is on hand to support you and your family, here or abroad, in your personal and professional lives. Taking a holistic view to understand and support your ambitions and challenges, we connect the dots, deliver seamless advice – and put your best interests first. 

Contact us.