Budget 2026: key takeaways for entrepreneurs, investors and high-net-worth individuals

John Healey’s first Budget as Chancellor was received calmly by financial markets and contained few major surprises. Although the Office for Budget Responsibility has upgraded its UK growth forecast to 1.2% in 2026, the country’s fiscal position remains challenging, while high energy prices are expected to keep inflation elevated well into next year.  

The Chancellor’s headline policy proposals centred on helping families cope with the rising cost of living, including a one-off £100 payment for 20 million households in council tax bands A to D to help cover fuel bills.

A number of measures contained in the speech are likely to have a significant impact – both positive and negative – on Britain’s entrepreneurs and company owners. Meanwhile, property investors and individuals with significant levels of cash savings are set to face further increases in tax rates. Taken as a whole, the Chancellor’s speech should give private clients and business-owning families a clear reason to review their affairs. 

Capital gains tax

Speculation in the run-up to the Budget had focused on whether Healey would increase the main rates of capital gains tax (CGT), possibly by equalising them with the rates of income tax on earnings. The Chancellor opted against a fundamental reform of CGT but announced changes to the CGT system that, while narrower in scope, are expected to have a large effect on many individuals and their families (see below). 

Business asset disposal relief

Formerly known as entrepreneurs’ relief, business asset disposal relief (BADR) enables company owners to qualify for a lower rate of CGT when they sell their firm. From 6 April 2027, the lifetime limit on BADR is being cut from the current £1 million to £500,000. Under the BADR system, qualifying disposals are taxed at 18% rather than the standard 24% rate. It is worth noting that, until 2025, the BADR rate was 10%. It was increased to 14% in 2025 and then to 18% in April this year. 

Founders’ relief

Conversely, the Chancellor said that the government would consult on plans to offer lower CGT rates for individuals who set up or invest in high-growth, innovative companies and then sell them. Qualifying entrepreneurs and owners will be eligible for a CGT rate of just 10% on business sales, up to a £10 million lifetime limit and subject to certain criteria related to turnover growth, number of employees and length of ownership. The detailed definition of a qualifying founder and company will be crucial.

Taken together, the changes to BADR and proposals for founders’ relief create a tension between increasing incentives for entrepreneurship and negatively changing the tax treatment of exits of businesses deemed not to be ‘high growth’. For founders and family-business owners, this is the time to consider ownership, business succession, an eventual sale, how value is extracted and how wealth will pass to the next generation. The cap on IHT relief introduced in April 2026 provides a further reason for business owners to get on with succession planning. 

Tax on savings and property income

The Chancellor also announced a further tax increase on income from savings interest and rent from property. The rate had been due to rise from the current 20%, 40% and 45% levels by two percentage points in April 2027. But this increase will now double, taking the basic rate to 24%, the higher rate to 44% and the additional rate to 49%. Although cash savers face higher tax on income from interest, the amount that can be put into a tax-free cash ISA (individual savings account) every year will remain at £20,000 after the government decided against reducing the limit.

For landlords and property investors, the important question is not simply whether tax has gone up. It is whether each property still delivers an acceptable return once tax, borrowing costs, regulation and any necessary future expenditure are taken into account.

What you should be doing now

This Budget creates opportunities for qualifying founders, but it also increases the pressure on property and investment income and reduces established capital gains tax relief for many other business owners.  

With the cap on IHT relief already affecting business founders, and pension wealth due to come into the scope of IHT from April 2027, clients should start planning now if they haven’t already. Effective succession and estate planning takes time because it must reconcile tax, control, income, family fairness and commercial continuity. 

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.