Azets Update. Preparing for the unknown: Tax planning in times of change

We know that further tax rises are coming, with announcements expected in the Autumn Budget. The recent changes to Inheritance Tax (IHT) are just the beginning, but the reality is that we don’t yet know what form future changes will take - or when they will arrive.

In the absence of certainty, the only responsible strategy is to plan with the current rules in mind while keeping an eye firmly on what could come next.

What might be coming next for individuals?

Speculation has been mounting on several fronts where personal taxes are concerned:

• Capital Gains Tax (CGT): There is talk of rate increases to bring CGT closer in line with income tax. This would have significant implications for anyone planning disposals of businesses, investments, or property.
• Inheritance Tax (IHT): Alongside the changes already announced and coming into effect from April 2026, there is speculation about introducing a lifetime cap on IHT-free gifting. This would represent a major shift in how families can pass on wealth.
• Wealth Tax: Calls for a direct wealth tax continue to surface, particularly as the government searches for ways to broaden the tax base.
• Property Taxes: Recent reports suggested that the Treasury has been asked to explore options for stimulating growth. Among the ideas now circulating is the replacement of stamp duty for England and Northern Ireland (Scotland and Wales set theirs separately) with an annual property levy on homes valued above £500,000 - a so-called “mansion tax.”

The challenge for individuals and businesses is that none of these proposals are confirmed, and there won’t be proper clarity until the Chancellor takes to her feet this Autumn. That uncertainty makes forward planning difficult, but it also makes timing crucial.

Acting early could help

The only certainty we have today is the tax framework as it stands now. For clients considering significant transactions - such as gifting assets, restructuring wealth, or crystallising gains through a sale - there is a case for acting before the Autumn Budget. Once changes are announced, it can sometimes be too late to act - as we saw with the recent CGT changes.

That means the next few months are likely to be busy, as individuals and businesses weigh up whether to move forward now or wait and accept the risk of higher future tax liabilities.

Limits of capital tax increases

While speculation continues to swirl, it is important to recognise that there is only so much revenue that can be raised from capital taxes. Increasing rates or tightening reliefs will almost certainly push more high-net-worth individuals and business owners to reconsider their position in the UK - a trend already accelerating under the new 10-year non-domicile rule.

If too many wealth creators exit the system, the long-term revenue-raising potential of capital taxes diminishes. In other words, capital taxation alone cannot solve the wider fiscal challenge. Broader economic growth will need to do the heavy lifting.

Preparing for the future

If there is one lesson in all this uncertainty, it is that proactive planning builds resilience. Those who anticipate and prepare put themselves in the strongest position to manage risk and seize opportunity.

Right now, that means:

• Reviewing your estate and succession plans in light of possible IHT restrictions.
• Considering the timing of any major asset disposals (CGT increases already coming into effect in April 2026).
• Assessing the exposure of property holdings to possible new annual taxes.
• Stress-testing your overall financial strategy against multiple scenarios.

We’re here to help

If you’re unsure where you stand and would like to discuss appropriate tax planning steps to suit your circumstances, please get in touch with Lyn Newbury, lyn.newbury@azets.co.uk or 01233 629255.