Autumn budget 2026: How will it affect business owners, agriculture & pensions?

Our private client experts take a look at how the 2026 autumn budget might affect you and your plans for your estate.

Andy Burnham and John Healey’s first budget – the third of this Labour government – was short on headlines for private individuals and business owners. The anticipated increase in the rate of capital gains tax did not materialise, nor were there any further reform to inheritance tax.

There were, however, a handful of points to be aware of, as highlighted by our highly rated wills, trusts & probate team.

Business owners & investors

The Chancellor announced the introduction of a new Founder’s Relief – with many hallmarks of Entrepreneurs Relief, the forerunner to Business Asset Disposal Relief.

Where conditions are met, the relief will see gains on disposals of shares or securities in the company taxed at 10%, subject to a lifetime limit of £10M.

Whilst this may sound like good news for business owners, the stringent tests envisaged in the newly released government consultation will significantly limit its application, ruling out many family businesses. It will instead have a focus on companies demonstrating consistent high growth and innovation.

The ‘founder’ will need to have held at least 25% of the ordinary share capital for at least five years, starting with the commencement of trading activity. The company will need to pass at least two of the following three tests:

• Turnover test: Annual average compound growth in turnover of 25% across three consecutive accounting periods within the ten years before disposal, with turnover of at least £10M in the accounting period before the first of these three periods.
• Headcount test: Annual average compound growth of at least 25% in qualifying full-time equivalent employees across three consecutive accounting periods within the ten years before disposal, with at least 15 full-time employees in the accounting period before the first of these three periods.
• Innovation test: the company must have:
  • incurred qualifying expenditure of £1.5M or more on research and development (R&D) for which it met all of the conditions to make an R&D tax relief claim, and;
  • claimed R&D tax reliefs for that expenditure for an accounting period or periods ending within the three years before disposal.

The majority of family business owners will instead have been hit by a reduction in the lifetime allowance for Business Asset Disposal Relief, cut from £1M to £500K. The benefit of the relief has already faced erosion in recent years, with the closing of the gap in the applicable tax rates (18%/24%). This reduction of the lifetime allowance will see the maximum potential saving applicable to BADR reduced from £60K to £30K.

No change to APR & BPR

Despite lobbying, there was no U-turn on the reforms to Agricultural Property Relief and Business Property Relief from inheritance tax announced last autumn.

Individuals with farms or family businesses should continue planning on the basis of the current rules. This should involve working with advisors to create a clear succession plan, incorporating a full review of governing documents (partnership agreements/shareholders agreements), wills and lasting powers of attorney.

Pensions & IHT: 6 April 2027 remains the date

Pensions are still due to be brought into account for inheritance tax purposes for deaths after 6 April 2027.

Many individuals have built their estate planning on the assumption that their pension would pass outside of their taxable estates. It’s worth revisiting that assumption and reviewing pension nomination forms to ensure they accurately reflect wishes and, as part of an estate planning review, the tax implications have been considered – particularly the upper threshold for the Residence Nil Rate Band.

If you have any questions about this year’s autumn budget and how it could affect you, please don’t hesitate to contact our friendly and expert team.

Our Legal 500-rated wills, trusts & probate team has the expertise to help you plan for the future.