Budget 2026: what it means for your money and investments

Budget 2026 is about more than changes to individual tax rates. Alongside HM Revenue & Customs’ (HMRC) new approach to wealthy taxpayers, it points towards a tax system in which investment income and wealth face greater scrutiny, while HMRC has increasingly sophisticated information at its disposal. 

The key numerical changes

The individual measures matter. But concentrating on them in isolation risks missing the bigger picture. 

Investment income will cost more 

The higher rates on savings and property income will particularly affect people who have accumulated substantial wealth outside of pensions and ISAs. 

From 6 April 2027, savings income will be taxed at 24%, 44% and 49%, depending on the taxpayer’s income level. Income tax rates on property profits will also rise to 24%, 44% and 49% in England, Wales and Northern Ireland. 

A two percentage point (on top of the 2% already expected from 2027) increase may not sound dramatic, but for somebody with £100,000 of taxable savings or property income all falling within the additional rate, moving from 45% to 49% would mean an additional £4,000 of income tax annually, ignoring allowances and individual circumstances. That makes it sensible to reconsider how investments are held. Tax should not drive an investment decision on its own, risk, liquidity, succession and longer-term objectives matter too, but the Budget provides a good reason to check whether existing arrangements still make sense. 

Additionally, on top of the headline increases in tax, from April 2029, there are plans to accelerate the payment of tax collected under self-assessment. The government today updated its consultation which is seeking views on suggested reforms where individuals with PAYE and self-assessment income will be required to pay their self-assessment liabilities in year, with consideration also being given to how payment of income tax can be accelerated for taxpayers who pay tax under self-assessment only. Whilst designed to break the tax payments down into more management chunks, it is not hard to see how this could have a detrimental effect on working capital for sole traders and partnerships and cashflow for individuals. 

Business owners should revisit exit plans 

The reduction in the lifetime limit for business asset disposal relief from £1 million to £500,000 from 6 April 2027 is significant for entrepreneurs considering a sale. 

Alongside this, the government is consulting on a new founders’ relief for qualifying founders and early investors. Its detailed design is not yet settled, however the scant details currently available indicate that the bar for qualifying for the relief is perhaps relatively high. 

For anyone anticipating a transaction, this deserves attention now, although that does not mean bringing forward a sale purely for tax reasons. Commercial considerations should be what drives a transaction. It does however mean understanding the impact of different timings before negotiations become too advanced to change course. 

HMRC will know considerably more about wealthy taxpayers 

For wealthy individuals, this is perhaps the more important development. 

HMRC defines its wealthy population as people who have had income above £200,000 or assets above £2 million in any of the previous three years. HMRC says this population reached 1.3 million in 2025 to 2026, contributing £160 billion of tax receipts. Its estimated wealthy tax gap for 2024 to 2025 was £3.6 billion. 

HMRC’s strategy published on 28 October describes plans to connect customer, entity, third-party and open-source information, providing a broader view of an individual’s assets, businesses, trusts, partnerships and offshore structures.  It also plans to use advanced analytics, automated triggers and artificial intelligence to identify emerging risks and target compliance work. 

This does not mean complex affairs imply non-compliance. HMRC itself acknowledges that they do not. But information which might previously have been viewed separately can increasingly be considered together. 

For clients, I think that expands the question from “Is my tax return correct?” to also include “Does my overall financial position preset a consistent story?” 

Offshore wealth will become more visible 

HMRC already receives information from more than 100 jurisdictions covering around 12 million offshore financial accounts each year. From 2027, it intends to use crypto-asset reporting framework data and enhanced common reporting standard information. 

For anyone holding overseas investments, bank accounts, trusts or property, this reinforces the need to make sure the UK tax treatment has been properly considered. 

The same principle applies to historic planning. An arrangement that was appropriate several years ago should not simply be rolled forward if family, commercial or tax circumstances have changed. 

Look at the whole picture 

The inclusion of most unused pension funds and pension death benefits within the inheritance tax estate from 6 April 2027 adds another reason to take a broader view. 

For families with businesses, property, pensions, trusts and investment portfolios, considering each asset separately is increasingly inadequate. Succession planning needs to look at the family balance sheet as a whole, including ownership, liquidity and who will ultimately benefit. 

We would not advocate wholesale changes simply because we have had another Budget, rather we would use it as a reason to test whether existing planning still works. 

For some families who have kept on top of planning on a regular basis, little may need changing, and that is a perfectly good outcome, however Knowing the position has been reviewed is very different from assuming yesterday’s planning will still work tomorrow. 

If your wealth spans businesses, investments, property, pensions, trusts or overseas interests, speak to your usual PKF Francis Clark contact about reviewing how Budget 2026 affects you and whether your existing arrangements remain appropriate.