Autumn Budget 2026: UK tax changes to prepare for now

How pensions will be treated for Inheritance Tax

From 6th April 2027, most unused pension funds and pension death benefits will be included in the deceased’s estate for inheritance tax purposes. There are exceptions, including qualifying death-in-service benefits, and exemptions such as the spouse exemption can still apply. This is not an automatic 40% charge on every pension.

Nevertheless, it changes the planning considerably.

For years, leaving a pension untouched while spending other assets could make sense from an inheritance tax perspective. The pension could often sit outside the taxable estate, ready to pass to the next generation.

That assumption now needs revisiting. A family who thought their estate was comfortably within the available allowances may find that adding the pension produces a rather different answer.

That does not mean everyone should rush to empty their pension. Withdrawals can trigger income tax, and money sitting in your bank account will not magically escape inheritance tax either. The sensible starting point is to review retirement spending, beneficiaries and the estate as a whole.

Preferably before making a large withdrawal you cannot undo.

Changes to pension salary sacrifice from April 2029

Pensions have another change coming, although this one waits until April 2029.

The National Insurance exemption for pension contributions funded through salary sacrifice will be limited to £2,000 a year. Above that amount, the sacrificed earnings will attract employee and employer National Insurance. Income tax relief remains available, subject to the usual rules.

The distinction matters. This is a cap on the NI advantage, not a £2,000 limit on pension contributions.

You can still save more. The combined NI cost for you and your employer will increase where contributions exceed the cap. Employers who share their NI savings by adding them to pension contributions will also need to consider what their arrangements will look like.

There is time to plan. There is also time to forget about it until payroll delivers the surprise.

How the trust Inheritance Tax reforms could affect you

The business property relief and agricultural property relief reforms began in April 2026, restricting the amount qualifying for 100% relief, with 50% relief generally applying above the available allowance. There is a £2.5 million trust allowance, but its availability and allocation depend on the trust’s history and the relevant rules.

For qualifying trusts holding business or agricultural property before 30th October 2024, the changes generally take effect at the next ten-year anniversary on or after 6th April 2026.

That is why a change already in force can still be a future issue for your trust.

Trustees who previously expected full relief may face a periodic inheritance tax charge. If the trust holds shares in a family business rather than cash, finding the money deserves some thought. “The assets are valuable” and “the trustees can pay the bill” are not necessarily the same thing.

Check the anniversary, the available relief and how any liability would be funded.

Using the Temporary Repatriation Facility

For former remittance basis users, another clock is ticking.

The Temporary Repatriation Facility allows eligible UK residents to designate qualifying overseas amounts, including certain pre-April 2025 foreign income and gains, at a reduced tax rate. That rate is 12% for 2026/27, rising to 15% for 2027/28, the facility’s final year.

Designated amounts can subsequently be brought to the UK without another tax charge on the remittance. The money does not have to arrive during the designation year.

On £500,000 of qualifying amounts, that three-percentage-point difference is £15,000. Do nothing and later bring the money to the UK without using the facility, and the bill could be considerably higher. If the full amount is foreign income taxable at 45%, the tax would be £225,000, compared with £60,000 at the 12% TRF rate. A difference of £165,000. Quite a price for leaving it in the “deal with later” pile.

The opportunity needs reviewing properly, particularly where accounts contain mixed funds or trusts are involved. But anyone expecting to use overseas wealth in the UK should understand the options while the lower rate remains available.

Tax increases for landlords and savers

From April 2027, the announced basic, higher and additional rates for savings income become 22%, 42% and 47% across the UK. Separate property income rates at those levels are also scheduled for England, Wales and Northern Ireland, subject to the devolved arrangements.

Available allowances and exemptions still matter, but the tax on income above them is increasing.

For landlords, that means revisiting what the property actually leaves you with after costs and tax. For savers, it means checking how much interest falls outside available allowances and whether existing ISA allowances are being used sensibly.

The headline return is only part of the story. What you get to keep is rather more useful.

What to review before the next Budget

The point is not to make every possible change before Budget day. As ever, don’t let the tax tail wag the dog. It is to check which announced changes affect you, when they bite, and whether your existing plans still make sense.

The next Budget will provide plenty to talk about. The previous ones have already provided plenty to do.