September 2025 has brought intense discussion ahead of the UK Autumn Budget, expected in November. Early signals from the Treasury suggest the government is preparing the most significant tax overhaul in a decade, covering Inheritance Tax (IHT), Capital Gains Tax (CGT) and possibly introducing a Wealth Tax targeting high-net-worth individuals.
The purpose is clear – to boost fiscal revenues, tackle inequality and restore public finances strained by years of economic pressure. If implemented, these measures could redefine how inheritance, investment and personal wealth are taxed from 2026 onwards.
Inheritance Tax remains one of the UK’s most politically charged taxes. The current rate of 40% applies to estates exceeding the £325,000 threshold (known as the nil-rate band), or £500,000 if a main residence is passed to direct descendants.
Those thresholds have been frozen since 2010, and house price inflation has pushed thousands more families into the IHT net each year. Once intended to apply only to the wealthy, the tax increasingly affects middle-class homeowners whose property values have soared.
HM Revenue & Customs data show IHT receipts climbing by over £100 million in the first half of the 2025/26 fiscal year, fuelling calls for reform. Possible scenarios include:
• raising the tax-free threshold,
• introducing graduated rates, or
• replacing IHT with a simplified lifetime transfer tax.
Some economists suggest that IHT could eventually be integrated with a future Wealth Tax to create a more coherent system of asset-based taxation.
Capital Gains Tax is also under scrutiny. Currently, most gains are taxed at 10% or 20% (28% for residential property), well below the higher rates of Income Tax.
According to the Financial Times, the Treasury is considering aligning CGT rates with Income Tax rates – a move that could generate an estimated £6 to £8 billion a year in additional revenue. If implemented, it would represent a major shift in UK tax policy, especially affecting property investors, entrepreneurs and shareholders who benefit from current reliefs such as Business Asset Disposal Relief.
Supporters argue that aligning rates would improve fairness and reduce tax arbitrage between labour and capital income. Critics warn it could discourage investment and innovation. Either way, CGT is set to become a central pillar of the 2025 Budget debate.
Perhaps the most headline-grabbing possibility is a Wealth Tax – something no UK government has ever implemented permanently. Amid rising public pressure to “tax the rich,” the idea has moved from activist discussions to official policy consultation papers.
Think-tanks such as the Resolution Foundation and the Institute for Fiscal Studies have suggested a limited Wealth Tax targeting individuals with net assets above £2 million. Such a tax could encompass real estate, shares, investment funds and luxury goods.
While the Treasury has not confirmed plans, the September 2025 briefing papers include references to a “tax fairness review,” implying that a Wealth Tax may enter the policy pipeline after 2026.
Speculation over potential tax increases has already shaken the property and investment markets. A Savills report notes a short-term surge in high-value property sales as owners seek to crystallise gains before any CGT rise.
Wealth management and tax advisory firms have also reported a wave of client enquiries about estate planning, gifting strategies and restructuring of family-owned businesses. Many high-net-worth individuals are taking pre-emptive steps to lock in current tax rates ahead of the Autumn Budget.
The government faces a delicate balancing act: raising revenue without damaging growth or alienating voters. The Chancellor has emphasised the need for a “simple, modern and fair” tax system that supports investment while funding public services.
With the public debt-to-GDP ratio remaining at historic highs and interest payments on government borrowing rising, the pressure to find new sources of funding is mounting. Analysts expect the reforms to be phased in – starting with IHT threshold adjustments and CGT rate changes, followed by a formal Wealth Tax proposal after further consultation.
While details are still under review, taxpayers and investors can take proactive steps now to mitigate risk and prepare for the new tax landscape:
• Review asset portfolios and identify exposure to CGT or IHT.
• Consider realising capital gains before any rate changes.
• Plan lifetime gifts and estate transfers strategically.
• Maintain accurate records of asset values and cost bases for future CGT calculations.
• Stay updated on HMRC guidance and Treasury consultations expected later in 2025.
Private wealth advisors expect a busy autumn season as clients seek clarity and guidance on how to respond to potential rule changes.
The UK Autumn Budget 2025 could mark a turning point in British tax policy. Whether the government chooses modest adjustments or sweeping reforms, the direction is clear – toward a broader tax base and a renewed focus on fairness.
Investors, homeowners and advisors alike should pay close attention to developments in the coming months. By understanding the trends and acting early, they can protect their interests and position themselves for whatever changes 2026 may bring.
Magda Mikulska
Tax Adviser Wisetax Founder
