The Autumn Budget takes place on 26 November 2025 (2025 Budget) and there has been much speculation as to what form the expected tax rises will take. In this update, we will look at possible changes to inheritance tax and capital gains tax.
Inheritance Tax
The Autumn Budget in 2024 (2024 Budget) saw radical reforms to the critical reliefs of Agricultural Property Relief (APR) and Business Property Relief (BPR) for inheritance tax which are due to come in from 6 April 2026. These reliefs are extremely valuable for business owners and entrepreneurs operating a trading business or those owning agricultural assets.
Whilst there are various anti forestalling measures in place since the 2024 Budget, there has been a window of opportunity for clients to review their affairs before April 2026. Our Private Client Division has been very busy supporting clients with their estate planning ahead of the proposed new inheritance tax regime.
News of further potential changes to the reliefs in the 2025 Budget has brought further uncertainty at what is already a hugely uncertain time. There are indications that the Centax Report is being reviewed by the Treasury and therefore whilst we have the draft legislation setting out how the proposed changes will be brought into force, further changes could be made. This may bring some welcome news to some but could cause even greater uncertainty for others.
In addition to tweaking the APR and BPR reliefs further, there is speculation that there will be changes to the rules concerning lifetime gifting in the 2025 Budget, whether by imposing a cap on the value of lifetime gifts, amending the taper rules (these apply if someone dies within seven years of making a gift and the rate at which inheritance tax is due decreases after year three) or extending the seven-year time period.
Capital Gains Tax
In the 2024 Budget, the Chancellor increased the rates of capital gains tax as well as making changes to Business Asset Disposal Relief.
We wait to see what will happen in the 2025 Budget, but among the possible areas of change include a mansion tax whereby homes over £1.5 million would no longer benefit from principal private residence relief when they come to sell, as well as the future of holdover relief and rollover relief which can be valuable for all, but particularly those in a business context.
Conclusion
There has been a great deal of speculation but until Rachel Reeves delivers the Budget on 26 November, nothing is set in stone.
It is sensible for clients to keep their affairs under review in order to take advantage of existing reliefs whilst being mindful of further changes.
We therefore wait to see what is announced and will be there to assist clients with their estate planning needs.
Key Contacts
The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at November 2025.