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Speculation suggests the Chancellor will seek to raise £20 billion through further tax measures.
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Our clients are particularly interested in any potential changes to the pension tax-free lump sum allowance and any further changes around inheritance tax (IHT).
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Of course, we cannot foresee what might could happen, but would encourage you to continue active discussions with your Client Advisor if these are topics of interest to you and your family.
- Our experienced Client Advisors and specialist Wealth Planning teams are here to help you navigate through any changes in policy, ensuring you’re well-prepared to make informed decisions ahead of the Autumn Budget.
Ahead of Rachel Reeves’ Autumn Budget on 26 November 2025, it’s hard to predict which taxes she’ll adjust or introduce. Speculation always circulates in advance of Budgets, and this year we observe suggestions that she may introduce some additional tax increases, which could affect people with assets and investments.
The UK Chancellor is in an unenviable position. Faced with sluggish economic growth and upward pressures on public spending, journalists, think tanks and commentators are suggesting she may need to find an extra £20 billion* in new tax measures.
We understand that potential changes can be an emotive topic for you, and we’re here to support you through any uncertainty. While we’re unable to offer advice based solely on speculation or rumours about possible measures, we’re closely monitoring developments. If you were considering making use of allowances that could be subject to change, it may be worth exploring options with your Client Advisor ahead of the Budget.
Possible tax measures
So, let’s start with what might happen and what we are watching. Over the past few months, there’s been chatter in policy circles about tax measures to do with wealth, property, capital, business and ‘stealth’ areas.
There are reportedly some voices inside Labour who have pushed for a wealth tax and there’s been speculation that property taxes could be revisited, with reform of stamp duty land tax and higher council tax rates or even a ‘mansion tax’. There has also been speculation that IHT allowances might become less generous, with tighter rules on lifetime gifts.
A possibility that’s drawn particular attention is lowering the tax-free lump sum that can be withdrawn from pensions. Currently, 25% from most pension schemes can be withdrawn without tax, up to a maximum of £268,275.
Recently, the Resolution Foundation think-tank made an entirely different proposal, urging Reeves to increase income tax by 2%, but also reduce the rate of employee national insurance by the same amount, saying this would raise £6bn a year for the Treasury. While politically hazardous, the measures would shift the tax burden away from workers and on to pensioners, landlords and the self-employed.
When it comes to Capital Gains Tax (CGT), last year’s budget saw a same day increase in rates. Whilst the increase in CGT at the last budget was expected, it did not go as far as some thought it would, so the chancellor could indeed revisit this. Clients may therefore wish to review their portfolios and discuss with their Client Advisors whether any action is appropriate in light of current rates and their personal circumstances.
Topics of interest with our clients
Over the past couple of months, we’ve been closely supporting our clients and listening to their views in the lead-up to the Autumn Budget. As your trusted partner, we’re here to walk you through your options.
Similarly, there’s a possibility that the Budget might reduce the level of tax relief for high earners saving into a pension. Again, our advice has to do with timing rather than making any wholesale change on the basis of speculation. If you’re making contributions and if you are able to do so, it’s potentially a good idea to accelerate them ahead of the Budget.
Another area of concern for clients is Inheritance Tax. There could be changes to the ‘seven-year’ rule that allows people to make a gift to inheritors, who won’t have to pay any tax providing you survive the gift by seven years. If you don’t live that long, the rate of tax is tapered from year three to seven. Without this relief, inheritance tax is levied at a rate of 40% above the nil rate band threshold of £325,000 per individual.
Once again, if you’re planning to make a gift of an asset it could be prudent to do so before 26 November. There’s no knowing whether the Treasury plans any changes, but it’s possible the current seven years could be stretched out to 10 years, or a lifetime cap be placed on the amount anyone can give under the rule. It’s good practice to regularly re-assess your plans.
Many of our clients are also exploring Life Insurance Policies as a practical solution to provide a source of liquidity to cover potential future IHT liabilities. While this may not shield you completely from changes in the upcoming Budget, if you currently face an IHT exposure, it offers a straightforward way to prepare for it - particularly if gifting assets isn’t viable at this time.
Talk to us
It remains an uncertain time for wealth owners, just a year on from the 2024 Autumn Budget that introduced measures affecting wealth planning, including increases in capital gains tax, bringing pensions within the scope of inheritance tax and limiting the tax relief on AIM shares. While the changes to relief offered through AIM holdings were material, AIM portfolios may still offer opportunities for clients, especially where inheritance tax mitigation and long-term growth remain priorities.
2024’s Budget was especially relevant for business owners and farmers, with changes limiting the scope of business property relief and agricultural property relief.
Suggestions from think tanks is that 2025’s Budget could be as consequential. This period presents an opportunity for individuals to assess their position and consider how potential reform could impact them.
Following the Budget on 26 November, we will spend time to understand how it could impact you, based on our understanding of your personal circumstances and financial goals.
Brown Shipley takes great pride in delivering comprehensive support to its clients, across our core services of Investment Management, Wealth Planning and Lending. Should you have any questions, at any time, please speak with your Client Advisor for assistance.
Source: *Institute for Government: The 2025 budget and beyond: How Rachel Reeves can approach tax reform to help drive growth | Institute for Government
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