The Autumn Budget and intergenerational wealth

The Autumn Budget will take place on Wednesday 28 October 2026. While no one can know exactly what the Chancellor will announce, families with significant wealth may be considering what potential tax changes could mean for their succession plans.

For many, questions about pensions, investments, property and gifting can be closely connected. The most important message before the Budget is to avoid acting suddenly on something you had not already planned.

Instead, use this period to understand your position, clarify your priorities and consider whether your current arrangements still support your long-term plans.

Intergenerational planning is not only about reducing tax. It is also about deciding how much you need to retain, what you would like to pass on and when your family may benefit most from receiving it.

Your priorities might include:

• Maintaining your own financial independence

• Helping children or grandchildren with property, education or business opportunities

• Passing on wealth in a fair and practical way

• Retaining flexibility if your circumstances change

• Providing support to children and grandchildren while you are still alive

• Ensuring your family understands how wealth should be managed in the future

These decisions can involve significant trade-offs. Giving away assets may reduce the value of your estate, but it can also affect your own financial security. Some decisions cannot easily be reversed, particularly where property, trusts or substantial gifts are involved.

One relevant confirmed change is the treatment of pensions for inheritance tax purposes.

For deaths on or after 6 April 2027, most unused pension funds and pension death benefits are expected to be included in the estate for inheritance tax purposes. This reduces one of the long-standing advantages of leaving pension wealth untouched for future beneficiaries.

Unused pension assets passed to children or other beneficiaries may be subject to inheritance tax at up to 40%, depending on the value of the estate and the reliefs available. Transfers between spouses and civil partners remain exempt.

There may also be income tax implications for beneficiaries. If the original pension holder dies aged 75 or over, beneficiaries will generally pay income tax at their marginal rate when they withdraw inherited pension funds.

For families with significant pension wealth, this may be a reason to review how pensions fit into the wider estate plan. That does not automatically mean withdrawing funds or changing your investment strategy. It means considering how your pension, other investments, property and spending needs work together.

Capital gains tax (CGT) is regularly the subject of Budget speculation. Some proposals have suggested increasing CGT rates or aligning them more closely with income tax rates. There has also been discussion of an exit tax for people leaving the UK and of changes to the way capital gains are treated when someone dies.

At present, death does not itself trigger CGT. Inherited assets are generally treated as acquired at their market value at the date of death. Inheritance tax may apply to the estate, while CGT generally applies only to any increase in value after death when an asset is later sold.

There has also been debate about property taxation, including Stamp Duty Land Tax and Council Tax. In England, a High Value Council Tax Surcharge is due to begin in April 2028 for properties valued at more than £2 million.

These proposals remain uncertain. It is important to distinguish between confirmed changes, possible reforms and speculation.

A useful starting point is to build a clear picture of your current position. This might include:

• Your income and regular expenditure

• The assets you own and how they are held

• Your pension arrangements

• Potential inheritance tax exposure

• Existing gifts, trusts or other succession arrangements

• The amount you may need during your lifetime

• The wealth you may eventually want to pass on

Cash flow planning can help show what you are likely to need in the future and what might be surplus to your requirements. This can support more informed conversations about gifting and succession planning.

For example, some people may consider using pension withdrawals to make gifts during their lifetime. These gifts may be treated as potentially exempt transfers, meaning the donor generally needs to survive seven years for the value to fall outside their estate for inheritance tax purposes.

Others may be considering how to fund a future inheritance tax liability, including whether life insurance could play a role. The right approach will depend on your circumstances, health, family relationships, assets and objectives.

The Budget may change the planning landscape, but it does not remove the need for careful, personal decision-making. Before taking action, consider the tax and non-tax consequences, including investment risk, access to capital and your own long-term financial security.

The period before the Budget is a good time to review your arrangements and identify the questions you want answered. Advice can help you understand how different choices could affect your family, now and in the future.

To discuss your financial planning and succession objectives, speak to your usual Evelyn Partners contact or book an apointment.