Autumn Budget 2026 summary: our take on what it means for you

John Healey's first Budget, on 28 October 2026, left income tax and capital gains tax rates alone. The changes that matter for our clients are smaller and more targeted: higher tax on savings and rental income, business asset disposal relief cut in half, a new Founders' Relief for business owners, and a U-turn on the cash ISA cut. Most of them start on 6 April 2027.^1,2,3

Autumn Budget 2026 at a glance

What	The change	When
Savings and rental income tax	Rates rise to 24%, 44% and 49%	6 April 2027
Cash ISA	£12,000 cut scrapped, £20,000 allowance stays	No change
Lifetime ISA	Penalty for homes above the £450,000 cap falls to 20%	29 October 2026
Business asset disposal relief	Lifetime limit halves to £500,000	6 April 2027
Founders' Relief	New 10% rate on up to £10m of gains, for qualifying founders	6 April 2027
Pensioners	No income tax if total income is no more than the full new State Pension	April 2027 to April 2030
Trading allowance	Rises from £1,000 to £3,000	April 2027
Mansion tax	Goes ahead for homes worth £2m or more	April 2028
State Pension	Triple lock becomes a double lock, if the government is re-elected	April 2030
Unchanged	Income tax and capital gains tax rates, dividend tax, pension allowances, inheritance tax bands, stamp duty

Sources: HMRC and HM Treasury Budget documents, and the other sources listed below.^1,2,3,4

Our take on the Budget

This was a cautious Budget, with no big reform and no headline tax rise. We feel the Chancellor is walking a tightrope, trying to keep bond markets happy at the same time as voters. For planning, the bigger news is what didn't change. Capital gains tax wasn't moved towards income tax rates, the limit on tax-free pension cash wasn't touched, and the gifting rules for inheritance tax stayed the same. If you'd held off selling a buy-to-let or an investment portfolio until after the Budget, you now know the capital gains tax rates you'll pay.^1,5

From April 2027, savings interest and rental profits will be taxed 4 percentage points higher than they are today, and the personal allowance and higher-rate threshold stay frozen until 2030/31. That makes ISAs and pensions more useful every year, and keeping the full £20,000 cash ISA allowance helps.^1,6

For business owners, Founders' Relief could be worth a lot to a small number of people, but HMRC's proposals aim it at fast-growing or research-intensive companies with at least £10m of turnover. The cut to business asset disposal relief is certain, and it lands on exactly the kind of owner-managed business sale we see most often.⁷

Savings tax and landlord tax: up again from April 2027

Income tax on savings interest and on rental profits will rise by a further 2 percentage points from April 2027. That's on top of the 2-point rise announced last year, so the rates will be 24%, 44% and 49%. The government says 84% of taxpayers will see no increase.^1,2,3

A higher-rate landlord with £20,000 of rental profit pays £8,000 this tax year and £8,800 from April 2027. A higher-rate saver with £10,000 of taxable interest goes from £4,000 to £4,400. The personal savings allowance and dividend tax rates don't change.^1,6

Landlords' groups aren't happy. The National Residential Landlords Association said the Chancellor had "made life harder for renters", warning that the tax rises will push up rents.⁸

Cash ISA limit: the £12,000 cut is scrapped

The plan to cut the cash ISA limit to £12,000 for under-65s from April 2027 won't go ahead. The ISA allowance stays at £20,000, and you can still hold all of it in cash. Fiona Clark of Goodman Jones called it "a sensible rethink of a policy that risked creating more problems than it solved". Not everyone agreed: Adrian Murphy of Murphy Wealth called it "a backward step". Our guide to the ISA allowance has the rules.^2,3,9

The Lifetime ISA penalty for buying a home above the £450,000 price cap falls from 25% to 20% from 29 October 2026. The charge for other early withdrawals stays at 25%. A new First Time Buyer ISA will replace the Lifetime ISA for new savers from April 2029.^3,10

Business asset disposal relief halved, new Founders' Relief

Capital gains tax stays at 18% and 24%, with a £3,000 annual exemption, and there's no change to the capital gains tax uplift on death. Business owners face two changes from 6 April 2027:^1,5

• The lifetime limit for business asset disposal relief falls from £1m to £500,000. The rate stays at 18%.
• A new Founders' Relief charges 10% capital gains tax on up to £10m of lifetime gains from selling shares.

The Chancellor said the business asset disposal relief change means "no changes for three in four claimants". For a higher-rate taxpayer selling a business with a £1m gain who doesn't qualify for Founders' Relief, the tax goes up from £180,000 to £210,000.^1,11

Founders' Relief is aimed at a narrow group. Under HMRC's proposals, the founder would need to have held at least 25% of the shares from when the business started trading, and kept them for at least five years. The company would need turnover of at least £10m and at least 15 full-time employees in the year before the sale. It would also need to pass two of three tests: fast turnover growth, fast growth in staff numbers, or at least £1.5m of research and development spending. HMRC is consulting on these conditions until 30 November 2026, so they may change before the relief starts.^4,7

Companies also get a bigger first-year allowance on main-rate plant and machinery, up from 40% to 50% from 1 January 2027, while the main writing-down allowance falls to 12% from April 2027. Our business owners page explains how we help with planning an exit, and our earlier article covers business asset disposal relief in more detail.^3,5,12

Income tax, pensioners and the State Pension

Income tax rates and bands don't change. The personal allowance stays at £12,570 and is still withdrawn above £100,000 of income, so the £100k tax trap remains.¹

For three tax years from April 2027, pensioners whose total income is no more than the full new State Pension will pay no income tax. The relief is withdrawn gradually for income above that level. The government expects around 500,000 pensioners to benefit in 2027-28. From April 2030, if the government is re-elected, the State Pension triple lock will be replaced by a double lock, rising with inflation or 2.5%, whichever is higher. The trading allowance for small side incomes triples from £1,000 to £3,000 from April 2027.^2,3,5,6

Pensions and inheritance tax

The pension annual allowance stays at £60,000 and the limit on tax-free cash at £268,275. The inheritance tax nil-rate band stays at £325,000, the residence nil-rate band at £175,000, and the £2.5m allowance for 100% agricultural and business property relief is unchanged. There was no change to the seven-year rule for gifts or the gifting exemptions. From 28 October 2026, pension death benefits paid more than two years after the scheme learns of a death no longer become taxable just because of the delay.^1,3,5

Mansion tax and property

The mansion tax, officially the High Value Council Tax Surcharge, goes ahead for homes in England worth £2m or more, from £2,500 a year up to £7,500 for homes over £5m. There will be a deferral scheme, some discounts and exemptions, and a 100% premium on homes left empty for 12 months or more. Stamp duty rates are unchanged.^1,3,6,13,14

The economy

The government's headroom against its main borrowing rule is £15bn in 2029-30, £9bn lower than in March, rising to £22bn in 2030-31. The Office for Budget Responsibility forecasts growth of 1.2% this year and 1% next year. Households in council tax bands A to D in England will get a £100 energy payment in 2027.^2,12

What to do now

If you're a landlord or hold large cash savings, look at how much of your income will be taxed at the higher rates from April 2027, and whether ISAs or pensions could shelter more of it. If you're planning to sell a business, check whether the new £500,000 limit or Founders' Relief applies to you, and when your sale is likely to happen. Our tax planning page explains how we help.

To talk through what the Budget means for you, book a consultation. The first meeting is at our cost.

Autumn Budget 2026: common questions

When do the Autumn Budget 2026 changes take effect?

The Lifetime ISA penalty cut applies from 29 October 2026. Most tax changes, including the higher savings and rental income tax rates, the £500,000 business asset disposal relief limit, Founders' Relief and the pensioner tax exemption, start on 6 April 2027. The mansion tax starts in April 2028, self-assessment payments on account change from April 2029, and the double lock for the State Pension would start in April 2030.^3,5,6

Is inheritance tax on pensions still going ahead in April 2027?

Yes. Most unused pension funds and death benefits come into inheritance tax from 6 April 2027. The Budget made only minor technical changes, such as letting executors direct pension schemes to pay the tax. Our guide to inheritance tax on pensions explains how it works.³

Does business asset disposal relief reduce the Founders' Relief limit?

Under HMRC's proposals, yes. The £10m Founders' Relief limit would be reduced by any business asset disposal relief or investors' relief claimed from 6 April 2027.⁷

Sources

Sources checked on 28 October 2026. Worked examples are illustrations using the published tax rates.

1. HMRC, Budget 2026: Annex A, rates and allowances, 28 October 2026.
2. HM Treasury, Budget 2026: Breathing space for today, hope for the future, 28 October 2026.
3. HMRC, Budget 2026: Overview of tax legislation and rates, 28 October 2026.
4. HMRC, Founders' Relief: technical consultation, 28 October 2026.
5. Bishop Fleming, Autumn Budget 2026 summary: key tax changes and announcements, 28 October 2026.
6. Unbiased, Autumn Budget 2026: what the key announcements mean for your money, 28 October 2026.
7. HM Treasury and HMRC, Capital Gains Tax: Founders' Relief, technical consultation, 28 October 2026.
8. LBC, Budget 2026 reaction: what have people said in response to John Healey's first speech?, 28 October 2026.
9. Portfolio Adviser, Autumn Budget 2026: Healey u-turns on cash ISA limit, 28 October 2026.
10. Financial Reporter, Budget: Government reduces Lifetime ISA withdrawal charges ahead of new FTB ISA launch, 28 October 2026.
11. City AM, Budget 2026: Healey reduces threshold for Business Asset Disposal Relief, 28 October 2026.
12. AOL, Budget 2026: key points announced by Chancellor John Healey in tax and spending speech, 28 October 2026.
13. GOV.UK, High Value Council Tax Surcharge.
14. The Negotiator, Autumn Budget 2026: what did Chancellor Healey announce for the housing market?, 28 October 2026.