Budget 2026: what could it mean for high-net-worth individuals?

As rumours swirl around the content of John Healey’s first Budget on 28 October, high-net-worth (HNW) individuals will be watching closely for signs of how the Chancellor’s tax plans could affect their wealth planning.

Although the latest data from the Office for National Statistics suggests the UK economy is in better-than-expected shape, the government remains under significant pressure to balance the books. As has been the case with most recent Budgets, a number of possible revenue-raising changes have been leaked to the media in advance. But as ever, it’s hard to say exactly which proposals will feature in the Chancellor’s speech.

The government has limited room for manoeuvre: in its 2024 manifesto, Labour pledged not to raise income tax rates, employee National Insurance or VAT.  So, the Treasury may need to take a more creative approach to finding new sources of tax revenue. 

For HNW individuals and their families, their finances could be affected by a number of targeted measures rather than one or two headline-grabbing policies. Technical changes to reliefs and allowances or the treatment of particular assets could affect wealth, property, investment and pensions. The cumulative effect on succession planning, investment decisions and long-term wealth structure could be considerable.

Inheritance tax: changes likely to be incremental

The current government has already made a number of changes to the inheritance tax (IHT) system: changes to Agricultural Property Relief and Business Property Relief were introduced in April 2026, while unused pension funds on death will be subject to IHT from April 2027. 

If further changes are included in this Budget, we believe they’re likely to focus on specific reliefs or exemptions rather than a more fundamental overhaul. But these could still have a significant effect on some families. 

Prime Minister Andy Burnham recently announced plans to reform the way the state funds long-term care for older people. Further changes to IHT could form part of the funding mechanism, but the reforms appear unlikely to be implemented in the current parliament. 

Capital-gains tax: an obvious target

There has been considerable speculation about reforms to the taxation of gains from investments and other assets. According to recent reports, the Chancellor has ruled out aligning capital-gains tax (CGT) rates with income tax. As with IHT, we believe we’re more likely to see targeted changes to rates and reliefs. Such changes could negatively affect investors, property owners and entrepreneurs and risk discouraging or delaying asset sales, property transactions and business disposals.

One potential option for Healey may be to revisit the CGT uplift that occurs upon death. Currently, this means beneficiaries inherit assets at their market value at the date of death rather than the deceased’s original acquisition cost, effectively wiping out the CGT liability. 

Why a wealth tax looks unlikely

While there have been vague discussions in the media about some form of wealth tax, no clear policy proposals have emerged. We think it’s relatively unlikely the Chancellor will introduce a new annual levy on wealth that sits apart from CGT and other property taxes, not least because such a system would be hugely complicated to design and administer.

Property: additional ‘mansion tax’ changes ruled out?

In last year’s Budget, former Chancellor Rachel Reeves announced the High Value Council Tax Surcharge. Sometimes referred to as a ‘mansion tax’, this is an additional tax on owners of residential properties in England that are valued at £2 million or more, which is due to take effect from April 2028. (A similar scheme, with a qualifying band starting at £1 million, is due to begin in Scotland at the same time.) There had been speculation that the Chancellor could reduce the qualifying threshold in England in order to increase potential revenues, but reports suggest he has ruled this out. 

Other possible changes include the reclassification of holiday lets as second homes. This would mean such properties no longer qualified for business-rates relief and could be liable for the higher rates of council tax on second homes that can now be levied by local authorities in England.

Could an exit tax be an option

Another measure that could affect HNW families is the creation of an exit tax. In some countries, exit or departure taxes are levied on the notional capital gains on assets owned by individuals who stop being residents for tax purposes. But the introduction of an exit tax in the UK would mark a significant policy change and would need careful design. It could also harm the country’s standing as a destination for internationally mobile entrepreneurs, investors and executives.

What HNW individuals should do now

We’d never advise HNW individuals to make major financial decisions solely in response to pre-Budget speculation. But the most significant risks and planning opportunities relate to measures that have already been announced rather than possible future reforms.

Reviewing arrangements such as wills, trusts, pension arrangements, and business ownership structures and succession plans, and optimising IHT exemptions, allowances and reliefs, is far more productive than trying to predict the Chancellor’s next move. The most successful planning strategies are built around long-term family objectives, not short-term political speculation.

Keep up to date with our Budget coverage

On 28 October, our experts will be providing instant reaction to the key Budget measures on our dedicated hub and our LinkedIn page. And in the following weeks, we’ll have in-depth analysis and advice on how the Chancellor’s measures will affect your business.