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The 2024 Autumn Budget brought a range of legislative changes that will affect the UK’s financial landscape well beyond the next fiscal year. From Capital Gains Tax (CGT) increases to Stamp Duty Land Tax (SDLT) hikes for landlords and second homeowners, the Chancellor announced tax rises worth £40 billion.
And of course, there was the headline news that Inheritance Tax (IHT) will be applied to unused pension benefits on death from April 2027. For many of our clients, this has marked a fundamental change in how legacy planning is approached – conversations have already begun and strategic planning is well underway.
Now we turn to the 2025 Autumn Budget which will be delivered on 26 November.
The government has not confirmed any clear legislative changes, but researchers estimate there is a “£41 billion black hole”[1] in the public finances, prompting many to believe that further tax rises are on the cards.
We take a closer look at some of the options available to the Chancellor and how they might affect you if they come to fruition.
A lifetime cap on Inheritance Tax-efficient gifting
As of the 2025/26 tax year, there are still ways to gift wisely – and keep more of your legacy intact.
These include:
- The modest annual exemption of £3,000 which can be spread among as many recipients as you like
- Potentially exempt transfers (PETs) which are IHT-free so long as the giver survives seven years after making them; if not, the value may be drawn back into the estate, with taper relief to soften the blow from year three.
- Gifting from surplus income, which involves a strategic gradual gifting strategy that, if done within the government’s stipulations, is entirely IHT-free.
There is also the option to gift wealth through a trust arrangement or family investment company.
However, as reported in FTAdviser[2], Treasury officials are looking at the potential introduction of a lifetime cap on tax-efficient gifting – a move that could change the landscape for estate planning. This could be in the form of a yearly cap or a cap on the total amount gifted over a person’s lifetime.
Chancellor Rachel Reeves is also said to be considering changes to the tapering rules, though details remain vague.
While it is unclear whether this legislation will come in, or how it will look, a lifetime cap on tax-efficient gifting could significantly increase the IHT your estate pays when you die.
Amid the speculation, some strategies – like gifting from surplus income – may remain untouched by the government’s potential announcements.
Pension restrictions
Following news that the amount of pension tax relief claimed by savers increased by £6 billion between 2022/23 and 2023/24[3], some forecasters believe that the Chancellor may slash the available reliefs to those contributing into a pension.
Under current rules, pension contributions (when paid in at source) typically attract basic rate (20%) tax relief. Higher- and additional-rate taxpayers can claim the difference via self-assessment – meaning high earners could receive up to 45% tax relief on qualifying contributions.
Ahead of the Budget, speculation about the future of pension tax relief is rife – as it was ahead of the previous Budget. Some believe the Chancellor may target the Annual Allowance, which is the amount most earners can put into a pension every year without generating a tax charge. A reduction could quietly reduce the build-up of retirement funds over time, particularly for higher earners.
Others speculate that a flat rate of tax relief is on the table. Such a move would level the playing field for basic rate taxpayers but would significantly diminish the advantages currently enjoyed by those in higher tax bands.
What’s more, it is rumoured that salary sacrifice schemes, in which employees exchange a portion of their earnings for employer-paid pension contributions or another benefit, may be limited for high earners.
Remember, the government has not announced any plans to limit tax relief on pensions or salary sacrifice arrangements – for now, these remain possibilities. That said, if there are any pension changes included in this year’s Autumn Budget, you may need to revisit your retirement plan and adjust to the new legislation.
Tax increases
Most headlines surrounding the upcoming Autumn Budget focus on tax.
Although there are plenty of contradictory rumours, there are some main themes:
- Income Tax: Despite murmurs of a potential uprating of the basic rate, the more probable outcome is a continued freeze on the Personal Allowance. Currently frozen at £12,570 until 2028, any further extension could deepen the effects of fiscal drag, nudging more earners into higher tax brackets over time.
- Capital Gains Tax (CGT): Following last year’s increase to the lower rate of CGT, further hikes seem unlikely. For now, it is expected that CGT will remain untouched.
- Inheritance Tax: As discussed, a lifetime gifting cap could be introduced. However, the rate of IHT (40%), along with the nil-rate bands, are not expected to change.
- Wealth Tax: The idea of a “wealth tax” that would focus on levying taxes on the UK’s wealthiest has resurfaced. But the government has not confirmed that it is planning to bring in a wealth tax, and if it does, it remains unclear who would be affected or how the tax would be levied.
As such, it’s wise to remain pragmatic and try to shut out media noise surrounding tax changes until Budget day.
Changes to property legislation
Finally, the government is expected to announce changes that may affect property owners.
The Treasury is proposing that rental income be included in National Insurance (NI) calculations, which would essentially levy a tax on landlords. Combined with the Renters’ Rights Bill and green energy reforms, a tax on rental income could further disincentivise buy-to-let property owners.
Estimations suggest that the above change could raise government revenue by £2 billion.[4]
What’s more, another report suggests that the Chancellor is considering an overhaul of SDLT and Council Tax. While specifics are yet unclear, it’s speculated that this system would reduce SDLT charges on the sale of many owner-occupied homes while potentially increasing annual local property taxes.[5]
If either or both of these measures come in, they could set widespread change in motion, potentially affecting property prices, rental revenue, and the overall cost of property ownership.
Get in touch to form a long-term plan with experts who care
If you are affected by any of the announcements, it’s important to seek advice before taking any action.
The IPS Capital investment management, wealth planning, and consultancy teams always stay abreast of legislative changes and will be ready to help you adapt.
Please contact your relationship manager or email info@ipscap.com for more information.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only. This article contains speculation on potential changes which should not be relied upon and may not materialise.
All information is correct at the time of writing and is subject to change in the future.
Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation and potential upcoming changes, which are subject to change.
The Financial Conduct Authority does not regulate tax planning or estate planning. IPS Capital does not provide tax advice.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.
Remember that taper relief only applies to gifts in excess of the nil-rate band. It follows that, if no tax is payable on the transfer because it does not exceed the nil-rate band (after cumulation), there can be no relief.
Taper relief does not reduce the value transferred; it reduces the tax payable as a consequence of that transfer.
[1] BBC News, ‘Reeves must raise tax to cover £41bn gap, says think tank’, 06.08.2025.
[2] FTAdviser, ‘Govt mulls idea of lifetime cap on gifting’, 14.08.25.
[3] PensionsAge, ‘Pension tax relief rises by over £6bn, fuelling Autumn Budget speculation’, 31.07.2025.
[4] The Guardian, ‘Treasury considering tax on landlords’ rent to raise £2bn’, 28.08.25
[5] The Guardian, ‘Reeves considers replacing stamp duty with new property tax’, 18.08.25.
