Autumn budget 2026: business relief and inheritance tax changes before 28th October

Most of us know unused pensions will fall into the inheritance tax net next April but what might the upcoming Autumn budget hold on 28^th October this year?

Based on the principle that it’s never too early to consider the impact of regulatory and political changes on your portfolio, the run-up to this year’s budget could be a good time to review your estate planning.

If you own a company, agricultural assets or investments that could qualify for business relief, changes introduced from April earlier this year could already affect how much of your estate qualifies for relief.

There is also speculation about whether the government could tinker further with inheritance tax, business relief or gifting.

But acting prematurely on budget rumours and speculation can be just as risky as doing nothing.

Rather than trying to predict what may be announced, might it be more useful to understand your position under the current rules, consider how different scenarios could affect you and make sure your financial plan is ready to adapt when the confirmed measures are announced?

At a glance: what do we know about inheritance tax and the autumn budget 2026?

Some important inheritance tax (IHT) changes are already confirmed, while other possible adjustments remain speculation.

• Business relief: From 6 April 2026, the amount of qualifying business and agricultural property eligible for 100% relief is subject to a combined £2.5 million allowance. Qualifying value above this generally receives 50% relief.
• Transferable allowance: An unused business relief allowance can potentially be transferred between spouses or civil partners, subject to the relevant conditions.
• AIM shares: Certain shares traded on markets such as AIM can now qualify for business relief at 50%.
• Pensions: From 6 April 2027, most unused pension funds and pension death benefits will be brought within the value of an estate for Inheritance Tax purposes.
• Further IHT changes: There is speculation about whether or not the government could make further amendments but nothing confirmed.
• What you can do now: Understand your current position, consider different scenarios and be ready to review your plan once the budget is announced.

What’s already changing for inheritance tax?

From 6 April 2026, the amount of qualifying business and agricultural property that can receive 100% business relief or agricultural relief is subject to a combined £2.5 million allowance. Qualifying value above the allowance can generally receive 50% relief.

An unused allowance may potentially be transferred between spouses or civil partners, subject to the relevant conditions. This means that, in some circumstances, a surviving spouse or civil partner could potentially benefit from an allowance of up to £5 million.

The rules also mean certain shares traded on markets that do not meet HMRC’s definition of being listed, such as those on the AIM, can qualify for business relief at 50%.

For business owners and investors who have previously relied on business relief as part of their estate planning, these changes may affect the amount of their estate that can qualify for relief.

And if you’re not sure, it may be worth reviewing your current position to understand more clearly if your existing arrangements are working as you would want them to.

Could business relief change again in the autumn budget?

There has been discussion about whether the government might do to business and/or agricultural relief but we’ll only know for sure when the Chancellor sits down at the end of his speech.

If you own a business, these points may be worth considering:

• What would happen if the current rules remain as they are?
• What would happen if relief was reduced further?
• Would your family/loved ones have enough liquidity to meet a potential IHT liability?
• Would your current plans still provide the retirement income you need?

These are questions that can be explored before the budget without having to be aware of the clock ticking.

Should you gift assets before the autumn budget?

The short answer is: not simply because you are worried about what might change.

There are several ways you can make gifts without an immediate IHT charge, including the £3,000 annual exemption and certain exemptions for smaller gifts, wedding or civil partnership gifts and regular gifts made from surplus income.

Larger gifts can also be made during your lifetime. However, the IHT treatment depends on the type and value of the gift, as well as your circumstances and how long you survive after making it. Some gifts can fall inside IHT if you die within seven years.

There is also a more fundamental question to consider:

Can you genuinely afford to give  money or assets away?

Reducing a potential IHT liability should not leave you short of money to enjoy retirement or deal with unexpected costs later in life.

Our gifting and inheritance tax guide explains some of the current rules in more detail.

What about trusts?

Trusts can be useful in some estate planning situations but are not a solution for everyone.

The tax treatment of trusts can be complex and depends on the type of trust, the assets involved and your circumstances.

There can also be tax consequences when assets are transferred into a trust, as well as implications for your access to and control over those assets.

For that reason, establishing a trust simply because you are concerned about a possible budget announcement is a big call to make.

Estate planning should start with what you are trying to achieve in the round, rather than looking at tools like trusts in isolation

For example, you may want to:

• provide for your children or grandchildren
• retain sufficient wealth to support your retirement
• protect assets for future generations
• reduce a potential IHT liability
• make sure your wishes are followed
• retain appropriate access to your wealth

How could the 2027 pensions-into-IHT affect your estate?

From 6^th  April 2027, most unused pension funds and pension death benefits will be brought within the value of an estate for IHT. HMRC has published further technical information explaining how this is expected to operate.

This could be particularly relevant if you have a significant pension and have previously planned to leave some or all of it to your family.

But it does not mean you should automatically withdraw money from that pension.

It bears repeating that your pension is to help provide financial security throughout retirement and taking money out earlier than you planned could create other tax consequences and may reduce the assets available to support your lifestyle.

Instead, view your pension alongside the rest of your estate and our guide to the 2027 inheritance tax pension changes gives you more detail.

How can cashflow modelling help you prepare for the budget?

One of the challenges with estate planning is a decision that looks sensible from a tax perspective may not necessarily be sensible for your wider financial position.

For example, imagine you are considering giving £500,000 to your children.

Reducing the value of your estate could potentially reduce IHT liability.

But what happens if you then need the money yourself?

What if you need additional care later in life?

What if investment returns are lower than expected?

What if your retirement lasts longer than originally anticipated?

This is where cashflow modelling comes in.

Rather than looking at one decision in isolation, financial planning can model how your wealth, income and expenditure could change over time in an interlinked way.

You can then consider different scenarios and understand how a potential decision could affect your wider financial plan.

For example, your financial planner could model the potential impact of:

• making a significant gift
• retaining assets within your estate
• changing your pension withdrawals
• different investment returns
• different levels of retirement spending
• potential IHT liabilities
• changes to business relief
• different life expectancy assumptions

This does not predict what will happen but can help you understand the potential outcomes to make a more informed decision.

At Foster Denovo, our financial planning means looking at individual decisions in the context of your wider wealth, lifestyle and long-term objectives.

Find out more about Foster Denovo’s financial planning approach.

What are the current inheritance tax allowances?

For the 2026/27 tax year, the standard nil rate band is £325,000 and the residence nil rate band is £175,000, subject to the relevant conditions and tapering rules. The standard IHT rate is 40%.

Depending on your circumstances, there are various exemptions and reliefs that may reduce the amount payable.

The composition of your estate, whether or not you are married or in a civil partnership, if you leave assets to direct descendants and the nature of your business or investments can all be relevant.

This is why simply calculating the value of your estate is not always enough. You need to understand how the different parts of your estate interact.

A pre-budget IHT checklist

1. Understand the value of your estate

Bring together your property, pensions, investments, savings, business interests and other assets.

2. Review your business relief position

If you own a business or qualifying investments, consider how the current rules could affect your estate.

3. Review your gifting plans

If you are considering giving money or assets to family members, consider both the potential IHT implications and if you can comfortably afford to make the gift.

4. Review your pension

Consider how the April 2027 changes could affect your estate and whether your current pension strategy still meets your retirement and estate planning objectives.

5. Consider your wider estate plan

Estate planning is about more than IHT. It can also involve your will, powers of attorney, trusts, investments, pensions and the way you want your wealth to be passed to future generations.

Find out more about our estate planning service.

6. Stress test your financial plan

Consider how different decisions could affect your income and wealth over the rest of your life.

This is where cashflow modelling can be particularly useful.

Rather than asking simply, “How much tax could I save?”, it can help you consider the wider question:

“Can I make this decision and still achieve the lifestyle and financial security I want?”

Should you wait until after the autumn budget?

Making an irreversible decision purely because of a budget rumour may not be welcome. Equally, waiting until afterwards before considering your position could also mean you have less time to respond to any confirmed announcements.

A sensible middle ground can be to review your position now, understand the potential outcomes and then make decisions once the confirmed rules are known.

That way, you are prepared without trying to predict the future.

The purpose of financial planning is not to predict exactly what will happen. It is to help you understand your options and make decisions that support your wider financial objectives.

What could the autumn budget 2026 mean for your estate?

What we do know is that the IHT landscape is already changing, with business relief restrictions now in effect and pension changes due from April 2027.

For wealthy families, these developments make reviewing your estate planning increasingly important.

The aim should not simply be to minimise tax.

It should be to make sure your financial plan supports your lifestyle, protects your financial security and reflects what you want to happen to your wealth in the future.

At Foster Denovo, we can help you look at your pensions, investments, estate and wider financial circumstances together.

If you are concerned about how October’s budget could affect your estate, book a meeting with Foster Denovo.

Frequently asked questions

Will Inheritance Tax rules change in the Autumn Budget 2026?

It is possible that the government could announce further changes, but these cannot be known until the Budget on 28 October 2026.

Some important changes have already been confirmed, so it can be useful to review your position before the Budget rather than waiting for the announcement.

Should I gift assets before the Autumn Budget 2026?

Not simply because you are concerned about possible Budget changes.

Gifting can have Inheritance Tax benefits in some circumstances, but it can also affect your own financial security and have other tax implications.

The decision should form part of your wider financial and estate planning.

Could Business Relief change in the Autumn Budget 2026?

There is speculation that the government could make further changes to Business Relief, but these have not been confirmed. Under the current rules, 100% relief is limited to a combined £2.5 million allowance for qualifying business and agricultural property, with 50% relief above that.

Will pensions be subject to Inheritance Tax?

From 6 April 2027, most unused pension funds and pension death benefits will be brought within the value of an estate for Inheritance Tax purposes.

This does not mean that withdrawing money from a pension is automatically the right solution. Your retirement income needs and wider financial position should be considered first.

How can financial planning help before the Budget?

Financial planning can help you understand how different decisions could affect your finances over time.

Cashflow modelling can be used to explore scenarios such as making a gift, changing pension withdrawals or facing a different potential Inheritance Tax liability.

This can help you make decisions based on your own financial circumstances rather than reacting to speculation.

When is the Autumn Budget 2026?

The Autumn Budget 2026 is scheduled for Wednesday 28^th  October 2026.

The exact measures affecting Inheritance Tax, Business Relief, pensions and gifting will only be known once the Budget is announced.

Important information

This article is for information purposes only and does not constitute personal financial advice. Tax treatment depends on individual circumstances and tax rules may change in the future.

The Financial Conduct Authority does not regulate tax and trust advice, will writing or powers of attorney.

The value of investments can go down as well as up and you may not get back the full amount invested.