John Healey has delivered his first delivered his first budget as Chancellor against a backdrop of noticeably less speculation compared to previous events.

As expected, it was relatively restrained in terms of headline changes, but there was an unexpected increase in the tax rate for savings and property income by another 2% from 6 April 2027.

There were some helpful tweaks to pension tax legislation and the planned reduction to the cash ISA limit will not now take place.

This is a roundup of announcements that may be useful (or interesting). All information is lifted directly from Autumn Budget-related documents published by the government (relevant links below), including the government’s Autumn Budget 2026 ‘Red Book’.

Headlines

• The Pension Tax Allowance: The government will introduce the Pension Tax Allowance (PTA), ensuring that pensioners whose total income is up to the value of the full new State Pension do not have the administrative burden of paying small amounts of tax.
• Changes to tax rates for savings and property income: The government is increasing all the rates of income tax applied to savings and property income by an additional 2 percentage points. The rates that will apply for such income from 6 April 2027 will now be 24% basic rate, 44% higher rate and 49% additional rate.
• Individual Savings Accounts: The planned reduction to the Cash ISA limit will now no longer take place. The current £20,000 limit will continue. While not covered in the Budget documents we expect that the planned anti-forestalling measures for Stocks and Shares ISAs will also be abandoned as they would now serve no purpose.
• First Time Buyers ISA: The government will introduce the new First Time Buyer ISA from April 2029. The product will retain the generosity of the Lifetime ISA, allowing contributions of up to £4,000 a year with a 25% government bonus.
• Pension Tax Allowance: The government will introduce the Pension Tax Allowance (PTA), ensuring that pensioners whose total income is up to the value of the full new State Pension do not have the administrative burden of paying small amounts of tax.
• National Living Wage and National Minimum Wage: On 1 April 2027, the National Living Wage will increase by 3.9% to £13.21 per hour; the National Minimum Wage will increase by 3.9% to £11.27 per hour for 18 to 20-year-olds and by 3.9% to £8.31 per hour for 16 to 17-year-olds and eligible apprentices; and the accommodation offset will rise by 3.9% to £11.53 per day.

National Insurance and Personal tax

Income Tax: Pension Tax Allowance

The government will introduce the Pension Tax Allowance (PTA), ensuring that pensioners whose total income is up to the value of the full new State Pension do not have the administrative burden of paying small amounts of tax. The value of the PTA is calculated by applying the basic rate of income tax (20%) to the difference between the full new State Pension and the Personal Allowance.

Individuals over State Pension age are eligible for the automatic tax deduction if their income, regardless of source, is below or at the value of the full new State Pension. For those with incomes just above the value of the full new State Pension, the allowance will be gradually withdrawn through a taper.

The allowance will apply from 6 April 2027 until 5 April 2030 and will be uprated in line with the full new State Pension across this Parliament. It will be legislated for in Finance Bill 2026-27 and the government will consider arrangements beyond April 2030 in the usual way.

Tax on savings income

The government is increasing all the rates of income tax applied to savings income by 2 percentage points. The savings basic rate will be 24%, the savings higher rate will be 44%, and the savings additional rate will be 49%.

These rates will apply across the UK. This will be legislated for in Finance Bill 2026-27 and take effect from 6 April 2027.

Changes to tax rates for property income

The government is increasing all the rates of income tax applied to property income by 2 percentage points. From 2027 to 2028, the property basic rate will be 24%, the property higher rate will be 44%, and the property additional rate will be 49%.

These rates will apply across England, Wales and Northern Ireland. This will be legislated for in Finance Bill 2026-27 and take effect from 6 April 2027.

Business mileage

In May, the government announced a temporary 55p per mile rate for the first 10,000 business miles for cars and vans. At this Budget, the government is making this permanent.

This will mean around 2 million employees and 1 million self-employed people, including care workers, social workers, electricians and plumbers, will see £120 a year in additional tax savings if they drive 6,000 business miles.

The government is also increasing the mileage rate above 10,000 business miles from 25p to 35p, allowing someone driving 15,000 business miles a year to receive up to £300 in additional tax savings from both upratings.

Capital Gains Tax

Founders’ relief

The government announced Founders’ Relief, a new Capital Gains Tax (CGT) relief for founders of and significant early investors in high-growth, innovative UK companies.

The relief will apply a 10% rate of CGT to qualifying disposals of shares, up to a lifetime limit of £10 million of gains per individual. This will incentivise those whose records, creativity and resilience in building successful businesses mean they have the potential to deliver even more UK jobs, growth and wider economic benefits in future.

Business Assets Disposal Relief (BADR): lifetime limit

The government will reduce the lifetime limit on gains eligible for BADR (which offers a reduced 18% rate of Capital Gains Tax on qualifying disposals) from £1 million to £500,000.

The new lifetime limit will apply to disposals made from 6 April 2027 and legislation will be introduced in Finance Bill 2026-27.

Inheritance Tax (IHT)

IHT on pensions

As announced at Budget 2026, the government will introduce legislation in Finance Bill 2026-27 to allow a prospective personal representative to direct pension scheme administrators to pay the inheritance tax due to HMRC when certain conditions are met.

Most unused pension funds and pension death benefits will be brought within the value of a person’s estate for inheritance tax purposes from 6 April 2027. This was legislated for in Finance Act 2026.

The government will also introduce legislation allowing those administering an estate to decide whether notional pension property included in the ‘general’ component of the estate or as a separate component for the purposes of calculating the reduced rate of inheritance tax when part of the estate is left to charity.

The changes will take effect from 6 April 2027. There is no tax information and impact note for this measure, the changes made here do not affect the impacting published in the 2025 tax information and impact note published here: Inheritance Tax — unused pension funds and death benefits - GOV.UK.

Pensions and Pensions tax

Guided Retirement and Retirement Collective Money Purchase (CMP)

As announced at Budget 2026, the government will introduce legislation in a future Finance Bill to support consolidation of Defined Contribution (DC) pensions and the introduction of Guided Retirement and Retirement-only Collective DC (RCDC) schemes.

Legislation will amend the conditions in which an individual may keep their pension age or lump sum protection following a transfer of their pension rights between pension schemes. The legislation will also enable individuals who start receiving a pension under a RCDC scheme to convert that pension to a drawdown pension within a set period, if the RCDC scheme chooses to provide that option.

Other legislative changes will be made to ensure the benefit payment rules can operate as intended for RCDC schemes and to allow transfers from drawdown funds to RCDC schemes.

HMRC Definition of Terminal Illness for Pensions Access

As announced at Budget 2026, the government will introduce legislation in Finance Bill 2026-27 to allow a serious ill-health lump sum to be paid where the pension scheme member can be reasonably expected to live for less than a year. This will apply to uncrystallised rights regardless of whether the member has reached the age of 75 (so whether it is taxable or not).

The measure will also amend the definition of a registered medical practitioner. This will allow a medical practitioner based outside the UK to provide medical evidence of a terminal diagnosis if the scheme member is living in the country where the practitioner practises medicine.

The change will take effect from the date of Royal Assent to Finance Bill 2026-27.

Collecting Tax Due on Excess Lump Sum Death Benefits

As announced at Budget 2026, the government will introduce legislation in Finance Bill 2026-27 to provide HMRC with a practical, standalone process for assessing and collecting tax due on lump sum death benefits.

Where a member who died before age 75’s available lump sum and death benefit allowance is exceeded, the excess will no longer be treated as pension income of individual beneficiaries. Instead, a tax charge will be raised against those beneficiaries on their portion of the excess by reference to their marginal rate of income tax for the year the lump sum was paid.

The measure will make consequential amendments to preserve the same income tax relief following this change where the benefit is subject to both inheritance tax and income tax, and will ensure that any refund of inheritance tax is brought into charge appropriately.

The measure will also make further, minor technical amendments governing the calculation of transitional disregards following the abolition of the lifetime allowance.

There are a number of differing effective dates for this measure. The measure will have retrospective effect for relevant lump sum death benefits paid on or after 6 April 2024. Transitional provisions will apply the same approach to relevant payments made in the 2023 to 2024 tax year.

Consequential changes concerning the interaction with Inheritance Tax will apply in relation to deaths occurring on or after 6 April 2027. Amendments to the lifetime allowance disregards will also have effect from 6 April 2024.

Tax Treatment of Pension and Lump Sum Death Benefits Under the Two-Year Rule

As announced at Budget 2026, the government will introduce legislation in Finance Bill 2026-27 to remove the two-year rule for pension and lump sum death benefits.

This will mean that tax-free pension and lump sum death benefits will no longer become taxable solely because they are paid more than two years after the pension scheme administrator first knew, or could reasonably have been expected to know, of the member’s death.

The change will apply both where a payment would otherwise be taxable as pension income of the recipient and where it would otherwise be subject to the special lump sum death benefits charge. The measure will have effect in relation to payments made on or after 28 October 2026.

Adjust the Triple Lock

Adjust the Triple Lock from the next Parliament to help fund a new settlement for older people: a state pension that rises every year, personal care free at the point of use and a high-quality National Care Service in England to give peace of mind in later life. The Prime Minister has agreed with Baroness Casey that her Independent Commission on Adult Social Care will now report in 2027.

By announcing an adjusted Triple Lock, the government is acting now to put the State Pension on a sustainable footing, while delivering a new settlement for older people: one that ensures pensioners continue to see a meaningful rise in their state pension each and every year; while building a National Care Service which will provide older people in England with personal care, free at the point of use.

Adjusting the Triple Lock will generate significant savings and materially improve the certainty of the State Pension spending trajectory. It removes the ‘ratchet’ effect, whereby the State Pension rises ever higher relative to earnings.

Following the introduction of the adjusted Triple Lock, the State Pension will track earnings over time. Adjusting the Triple Lock is estimated to reduce State Pension spending by £15 billion a year by the late 2030s, and by £50 billion a year by the late 2040s.

Enabling defined benefit (DB) pension scheme surplus payments to scheme members

As announced at Autumn Budget 2025, the government will introduce legislation in Finance Bill 2026-27 to enable defined benefit occupational pension schemes to make direct payments of surplus assets to members, where permitted by scheme rules and subject to trustee discretion.

These authorised member surplus payments will be taxed as pension income where specified conditions are met, including requirements relating to the scheme’s funding position and the member having reached Normal Minimum Pension Age or, where applicable, their protected pension age.

The legislation will include safeguards to prevent avoidance. The change will take effect from 6 April 2027.

Savings

ISA Reform

The government is retaining the annual cash Individual Savings Accounts (ISA) subscription limits at £20,000.

While not covered in the Autumn Budget we expect that the planned anti-forestalling measures for Stocks and Shares ISA managers will also be abandoned as they would now serve no purpose.

Lifetime ISA Reform - First Time Buyers ISA

To support savers to save for a deposit for their first home, the government will introduce the new First Time Buyer ISA from April 2029. The product will retain the generosity of the Lifetime ISA, allowing contributions of up to £4,000 a year with a 25% government bonus.

The bonus will be paid on the value of the account balance when funds are withdrawn for a qualifying first home purchase, up to the value of £450,000, so avoiding the need for any withdrawal charge. The new product will have no upper age restriction.

In recognition that some Lifetime ISA holders may wish to purchase a property above the £450,000 property price cap, the government will from 29 October 2026 allow Lifetime ISA funds to be withdrawn for such purchases which otherwise meet the qualifying rules, with a reduced withdrawal charge of 20%, ensuring the value of individual contributions is protected if the value of the property is above the price cap.

New ISA incentive

The government will work with industry to explore a new ISA incentive for people investing in a stocks and shares ISA for the first time. The detailed design will be developed with industry.

ISA manager compliance

The government will strengthen the compliance framework for Individual Savings Account (ISA) managers. From 6 April 2028 HMRC will be able to suspend non-compliant ISA managers and there will be new penalties for breaching ISA regulations, including points-based penalties for failures to submit required ISA reports and returns.

Stamp duty modernisation

Following consultations in 2023 and 2025, and the publication of draft legislation in July, the government will introduce legislation in Finance Bill 2026-27 to introduce the Securities Transfer Tax from late 2027. The Securities Transfer Tax will replace Stamp Duty and Stamp Duty Reserve Tax.

Property

Your First Home Scheme

The government is also supporting people without access to the ‘bank of mum and dad’ to buy their own homes. The new £4.7 billion Your First Home scheme will help around 70,000 households in England to take their first step onto the housing ladder and support the delivery of an estimated 20,000 new homes.

The scheme will provide 20% equity loans to first-time buyers who would not otherwise be in a position to purchase a residential property. Income caps will be set at £110,000 per household outside London and £140,000 inside London. Price caps will be set based on local authority median prices to ensure support is targeted at those who need it, with inner and outer London caps of £650,000 and £500,000 respectively.

The deposit requirement will be set at 2.5%, with a maximum deposit of 15%. People will be able to access equity loans with a five-year interest free period, with a gradual increase after five years. That means those who use the scheme could save hundreds of pounds per month compared with a standard mortgage.

Developers will be expected to make a contribution when signing up to the scheme to help cover costs, set on a sliding scale to protect smaller developments. Funding will be capped annually but government will work with developers and lenders to monitor demand.

The scheme will open for pre-registration by the end of December 2026 and full applications from February 2027 with the first loans issued from April 2027.

In the near-term, the scheme will be delivered by Homes England drawing on the support, expertise and capitalisation of the National Housing Bank, which will take on responsibility for the scheme in the medium term, subject to the necessary legal and regulatory changes, with a review point next autumn to take stock on progress.

To enable this, MHCLG will legislate as soon as Parliamentary time allows to provide an appropriate legislative and regulatory basis.

Corporate and Business Tax

Business rates

Small Business Rates Relief (SBRR) threshold raised from £12,000 to £18,000. Businesses with premises that have a rateable value below this level will pay no business rates.

Increase Trading Allowance

The government will increase the Trading Allowance from £1,000 to £3,000, allowing individuals to receive up to £3,000 of trading and miscellaneous income tax-free each year. This will be introduced through Finance Bill 2026-27 and will take effect from 6 April 2027.

Building on the increased benefits expected from existing third-party data reforms, the government will consult on expanding third-party reporting requirements for property income data, improving the information available across the tax system to support compliance while reducing unnecessary interventions and burdens for taxpayers who are meeting their obligations.

Corporate Tax simplification for business investment

The government is publishing a consultation exploring opportunities for targeted simplifications to the Corporate Tax system that could improve certainty and support investment, growth and competitiveness. The government will work with stakeholders over the next year to develop and prioritise reforms.

VAT online marketplace liability (OMPL)

From October 2027, VAT OMPL rules will be extended to UK businesses.

Online marketplaces will be responsible for collecting VAT on sales by UK VAT-registered businesses and any other UK business with a minimum annual sales threshold per platform of £90,000. The rules will not apply to non-business (i.e. personal) sales, second-hand goods, or business-to-business transactions.

Increase in rate of the Bank Corporation Tax surcharge for a temporary period

The government will temporarily increase the surcharge rate to 6% for 15 months, from 1 January 2027 to 31 March 2028, returning to 3% from 1 April 2028. This measure will be legislated for in Finance Bill 2026–27.

The government is modernising the taxation of foreign sovereign investment, putting it on a statutory footing for the first time and giving greater certainty to sovereign investors.

The new regime will bring certain real estate income and gains into UK tax, while maintaining a globally competitive offer for foreign sovereign investment in the UK, including through bespoke rules to access Real Estate Investment Trusts for investments in UK real estate.

Zero-rate on land sold to social housing providers

The government will implement a zero-rate of VAT for land sold to registered providers of social housing (relevant Housing Associations). This will be introduced through secondary legislation in early 2027 and take effect from 1 April 2027.

VAT

No general increase to VAT rates, as per Labour’s manifesto promise.

Other announcements

Increase in the National Living Wage

On 1 April 2027, the National Living Wage will increase by 3.9% to £13.21 per hour; the National Minimum Wage will increase by 3.9% to £11.27 per hour for 18 to 20-year-olds and by 3.9% to £8.31 per hour for 16 to 17-year-olds and eligible apprentices; and the accommodation offset will rise by 3.9% to £11.53 per day.

Writing down allowances

The government will introduce legislation in Finance Bill 2026-27 to increase the main rate first-year allowance to 50% for expenditure incurred on or after 1 January 2027 and to reduce the main rate writing down allowance to 12%, with effect from 1 April 2027 for Corporation Tax and 6 April 2027 for Income Tax.

Enterprise Management Incentives 2

The government will increase the Company Share Option Plan (CSOP) individual option limit from £60,000 to £120,000, remove the interaction with the Enterprise Management Incentive (EMI) option limit, allowing eligible employees to receive the full amount of options available under each scheme and extend the CSOP exercise period from 10 to 15 years.

To help businesses understand how the schemes fit together, CSOP will be known as EMI2, reflecting its role as an option for growing companies that have moved beyond EMI or are not eligible for EMI.

The changes will apply from 6 April 2027 and be introduced through Finance Bill 2026-27.

Employee Share Schemes: enhanced flexibility

The government will provide greater flexibility under the Enterprise Management Incentives (EMI) rules by extending the exercise window for individuals following disqualifying events from 90 to 180 days. Companies transitioning to an Employee Ownership Trust structure will retain access to EMI. Shares and share options set aside for employees will be able to be held for 15 years without triggering disguised remuneration rules.

The changes will be introduced in Finance Bill 2026-27 and will take effect from 6 April 2027.

Fuel Duty

The government will extend the temporary 5p-per-litre fuel duty cut for a further six months to 1 July 2027. The government is also deferring the planned RPI inflation increase to 1 July 2027.

Abolish gas standing charges

The government has asked Ofgem to abolish gas standing charges on domestic energy bills in Great Britain, aiming for delivery by the end of 2027 or as soon as possible after then. The government is also committing to reform electricity standing charges and will set out details next year.

Legislation

As usual, the Chancellor's Budget statement will include resolutions made under the Provisional Collection of Taxes Act 1968 for any measures that are expected to come into effect ahead of a Finance Bill gaining Royal Assent. Therefore, once the House of Commons has agreed the Budget Resolutions, required changes will be included in the new Finance Bill, or implemented by Treasury Order.

Links to further information

• Link to main Treasury news web page: Budget 2026 document - GOV.UK
• Autumn Budget 2026 ‘Red Book’: Budget 2026 – Breathing Space for today, Fresh hope for the future
• OBR Economic and fiscal outlook: Budget 2026 — Overview of tax legislation and rates (OOTLAR) - GOV.UK
• ISA Compliance package: Individual Savings Accounts (ISAs) compliance package - GOV.UK

Important Information

Please note this is for general information only and is based on LV=’s understanding of the relevant legislation and regulations and may be subject to change.

The tax treatment of benefits depends on individual circumstances, and may be subject to change in the future.

The use of this document is at your own risk, and the content should not be used for the provision of professional advice.

LV= accept no liability for any damages, losses or causes of action of any nature arising from your use of this document.