What the Autumn Budget 2026 means for high net worth individuals

This Budget asks more of people whose income and gains come from assets making high net worth individuals (HNWIs) directly affected.

A Budget that taxes assets, not earnings

Chancellor John Healey’s first Budget today leaves tax on earnings untouched but asks more of people whose income and gains come from assets. That makes high net worth individuals (HNWIs) most directly affected.

Healey framed his Budget around ‘breathing space’ for households facing higher energy costs. The government rejected broad-based tax rises. Instead, it is raising revenue from savings and property income, trimming a key capital gains relief and tightening anti-avoidance rules.

The Treasury estimates that 84% of income taxpayers will not be affected by the savings and property income changes. Around half of the extra revenue is expected to come from the top 10% of households.

But there is some good news, founders of high-growth companies may gain a generous new capital gains relief, pension death benefits have been simplified, and internationally mobile families moving to the UK get some practical easements.

Savings and property income: a further 2% on every band

From 6 April 2027, tax on savings and property income rises by a further two percentage points in every band. This comes on top of the two-point rise already announced at Budget 2025. As a result additional rate taxpayers will pay 49% on interest and rental profits.

The new property rates apply in England, Wales and Northern Ireland, while the savings rates apply across the whole UK.

For HNWIs, the impact of the changes impact these three groups:

• Private landlords holding residential or commercial property personally (self managed), rather than through a company.
• Holders of large cash deposits, gilts or corporate bonds outside ISAs and pensions.
• Retirees living on investment income, where interest and rent form much of their taxable income.

The annual ISA allowance remains £20,000, and the government has shelved plans to reduce the cash ISA limit. Dividend tax rates were not changed in the Budget.

Longer term, the government will reform how company distributions to individual shareholders are taxed from April 2028. The aim is to stop taxpayers taking advice to choose a structure purely for a better rate.  Genuine changes of ownership, including families passing down a business, will keep capital treatment the Treasury has said. Draft legislation is due in 2027 and we hope for more details soon.

Capital gains: less for traditional business owners, more for founders

The Budget halves the lifetime limit for Business Asset Disposal Relief (BADR) but introduces an increased relief for founders of high-growth companies.  Exit tax bills will depend on which side of that line a business owner falls.

BADR. Halving the limit means an owner selling a qualifying business for a £1 million gain could lose relief on £500,000 of it. According to the Treasury three-quarters of claimants will still get relief on their entire gain, so only larger disposals will be affected.

Founders’ Relief. Qualifying founders of high-growth, innovative companies will pay just 10% on up to £10 million of lifetime gains. A technical consultation will be launched shortly on the detail of eligibility but initially they look fairly stringent. Currently, it would not be wise for owners of established family firms, property businesses or lifestyle businesses to assume that they will qualify.

Share schemes and investment reliefs. The Company Share Option Plan is renamed EMI2, with the individual option limit doubled from £60,000 to £120,000 from 6 April 2027.

The Venture Capital Trust (VCT), Enterprise Investment Scheme (EIS)and Seed Enterprise Investment Scheme (SEIS) will be subject to technical changes to make them more user-friendly, there will also be tougher scrutiny of excessive fees.

Inheritance tax and pensions: targeted changes, effective immediately.

There is no headline change to inheritance tax thresholds or reliefs, but two changes were announced which took effect immediately (on the day of the Budget 28 October 2026).

Trust liabilities. The government is amending inheritance tax rules on when debts linked to trust property can reduce the value of assets for inheritance tax. Treatment will be aligned with personal liabilities and anti-avoidance provisions strengthened. The change applies to deaths and other chargeable events from 28 October 2026, so trusts holding borrowing against their assets should be reviewed now.

Pension death benefits. The two-year rule is removed. Beneficiaries will no longer become taxable just because a tax-free pension or lump sum death benefit is paid more than two years after the member’s death. This applies to payments made on or after 28 October 2026 and removes a common trap for executors of complex estates.

The government will also change how tax is collected where a deceased member’s lump sum and death benefit allowance has been exceeded, to give beneficiaries more certainty. Healey also took the opportunity to restate the previously announced cap on pension contributions that can be made through salary sacrifice which is due to come into effect on 6 April 2029.

Property, residence and HMRC scrutiny.

Owners of high-value homes, internationally mobile families and anyone with complex affairs face a mix of confirmed charges, practical easements and closer HMRC attention.

High Value Council Tax Surcharge. The government has confirmed the structure of the annual surcharge on homes valued at £2m or more in England (often referred to as the Mansion Tax), due from 1 April 2028. It will include a deferral scheme and a series of discounts and exemptions. A 100% premium will apply to properties left empty and unoccupied for 12 months or more, which will impact owners of high-value second homes and investment properties that are not occupied.

ATED. Annual Tax on Enveloped Dwellings charges rise by 3.5% for 2027-28, in line with inflation, for homes held through companies.

Moving to the UK. The government is easing the capital gains exit charge when a trust stops being UK resident because of trustee migration.  This will come into effect from 28 October 2026. It will also create double tax relief for UK investors in US limited liability companies, with legislation expected in Finance Bill 2027-28. These changes will help US connected families and those relocating with existing trust structures.

The residence-based regime. The regime that replaced non-dom status is not changed, but the government has stated that it will keep assessing whether it strikes the right balance. As more evidence emerges next year further changes cannot be ruled out.

HMRC compliance. HMRC has published a multi-year plan for how it oversees wealthy taxpayers, using more data, technology and specialist expertise to spot non-compliance earlier. This Budget funds 670 extra compliance officers.  Later this year a consultation on reforming offshore penalties will be launched. Payments on Account for Self Assessment will move to smaller, more regular instalments from April 2029.

As an HNWIs what should you consider now?

Most of the new charges start on 6 April 2027, which leaves a window of just over five months to plan. Areas worth discussing with your advisor include:

• Timing business disposals. Owners planning a sale may benefit from completing before 6 April 2027 while the £1 million BADR limit still applies, provided the commercial case stands up.
• Checking Founders’ Relief eligibility. Founders of high-growth companies should follow the consultation closely before deciding when to sell.
• Restructuring investment income. Using ISA allowances in full, reviewing how property is held and balancing income between spouses can help soften the 49% top rate.
• Reviewing trusts with borrowing. The new inheritance tax rules on trust liabilities already apply, so existing arrangements should be checked.
• Updating estate plans. Removing the two-year rule on pension death benefits gives executors more flexibility, and wills and expressions of wish may need revisiting.
• Preparing for HMRC scrutiny. With more data and more compliance officers focused on the wealthy, clear records and early disclosure is evermore important.

Many measures are still subject to consultation and will be legislated in Finance Bill 2026-27, so details may change. This article is general information and as we understand matters at the time of writing and cannot be taken as tax advice.

Source: HM Treasury, Budget 2026 (HC 726), 28 October 2026.

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