Budget 2026: other tax changes that affect your estate
Beyond inheritance tax
Budget 2026 also changed several taxes on savings, property and businesses that affect what you pass on.
These changes do not alter how inheritance tax works. But they change how much your savings, rental property and business earn or sell for, and so what is left for your family. Most start on 6 April 2027.
They also affect estates while they are being dealt with. Interest on savings and rent from property can keep coming in for months after a death, and executors pay tax on it. Here is what changed, and what stayed the same.
Higher tax on savings and rental income
From 6 April 2027, tax on savings interest and property income goes up by 4 percentage points.
| Income | Now | From April 2027 |
|---|---|---|
| Savings interest | 20% / 40% / 45% | 24% / 44% / 49% |
| Rental income | 20% / 40% / 45% | 24% / 44% / 49% |
For example, a basic rate taxpayer with £10,000 of rental profit would pay £2,400 instead of £2,000, an extra £400 a year. Dividend tax rates do not change.
The personal savings allowance stays at £1,000 for basic rate taxpayers and £500 for higher rate. Wales can set its own property income rates. If you own buy-to-let property, this is worth planning for.
Surcharge on homes worth £2 million or more
From 1 April 2028, homes in England worth £2 million or more face an extra yearly charge.
| Home value | Yearly charge |
|---|---|
| £2m to £2.5m | £2,500 |
| £2.5m to £3.5m | £3,500 |
| £3.5m to £5m | £5,000 |
| £5m and above | £7,500 |
It is collected with council tax. The Valuation Office will value the homes in scope and place them in a band. Payment can be put off until the home changes hands, for those who qualify. Around 150,000 people are expected to be affected.
It does not apply in Wales. It matters for families with homes in our Hampshire, Dorset, Wiltshire and Somerset areas, and for anyone inheriting a high-value home in England.
Changes for business owners
Two capital gains tax changes affect passing on or selling a business from 6 April 2027.
- Business Asset Disposal Relief halved. The lifetime limit falls from £1 million to £500,000. The rate stays at 18%. On a £1 million gain, a higher rate taxpayer would pay around £30,000 more, because half the gain is now taxed at 24%.
- Gifting business shares. The rules for putting off capital gains tax when you give away shares in a family company have been updated. Purely trading companies are not affected.
If you plan to sell your business or hand shares to your children, the timing now matters more. Contracts signed before 6 April 2027 but completed later have special rules. Inheritance tax relief for businesses is separate, and was capped at £2.5 million in April 2026. Read our guide to business and farm relief.
What stayed the same
Some good news: the cash ISA limit stays at £20,000, reversing a planned cut.
The Junior ISA limit stays at £9,000, and pension limits are unchanged for 2027/28. Capital gains tax rates stay at 18% and 24%. If your savings, property or business make up a large part of your estate, it is worth checking how these changes fit with your plans for this tax year.
How PJH Estate Planning can help
PJH Estate Planning can review your will, LPAs and tax plans against the latest rules. Start with our free Estate Health Check: 10 quick questions that show any gaps in your plans. You can visit our offices, or we can visit you at home.
Sources
- GOV.UK: Budget 2026 overview of tax legislation and rates
- GOV.UK: Budget 2026 rates and allowances
- GOV.UK: High Value Council Tax Surcharge
- GOV.UK: Capital Gains Tax relief for gifts of business assets
General information as at October 2026. Not legal, financial or tax advice.