Prepare clients for the 2027 tax changes: an adviser’s checklist after the Autumn Budget 2026

The 2027 tax changes will affect how UK financial advisers approach pensions, inheritance tax, savings income, property income and long-term financial planning. Chancellor John Healey’s Autumn Budget, delivered on 28 October 2026, has also changed several measures advisers may already have discussed with clients.

The government has cancelled the planned reduction in the cash ISA allowance, increased the scheduled tax rises on savings and property income, and announced changes affecting business owners, first-time buyers and pensioners.

For advisers, the priority is to identify which clients may be affected, explain the confirmed changes accurately and assess whether their existing financial plans remain appropriate.

This updated checklist covers the key reforms, their implementation dates and practical considerations for client reviews.

Which 2027 tax changes should financial advisers know about?

The Autumn Budget 2026 confirmed several new measures for April 2027 while retaining or revising previously announced reforms.

Change	Effective date	What advisers need to know
Pensions and inheritance tax	6 April 2027	Most unused pension funds and pension death benefits enter estates for IHT purposes, subject to exceptions. Previously legislated.
Cash ISA allowance	April 2027 onwards	The planned £12,000 limit has been cancelled. The £20,000 annual limit remains for all eligible adults.
Savings income tax	6 April 2027	Basic, higher and additional rates rise to 24%, 44% and 49%.
Property income tax	6 April 2027	Rates rise to 24%, 44% and 49% in England, Wales and Northern Ireland. Scottish treatment differs.
Business Asset Disposal Relief	6 April 2027	The lifetime limit on qualifying gains falls from £1 million to £500,000.
Founders’ Relief	6 April 2027	A new 10% CGT rate on up to £10 million of qualifying lifetime gains for eligible founders.
Pension Tax Allowance	6 April 2027	A new income tax reduction for eligible pensioners with income at or near the full new State Pension.
Lifetime ISA withdrawal charge	29 October 2026	The charge falls to 20% for qualifying first-home purchases above the £450,000 property price cap.
First Time Buyer ISA	April 2029	A new ISA will replace the Lifetime ISA for new savers, with existing holders allowed to retain their accounts.
Pension salary sacrifice	6 April 2029	National Insurance contributions will apply to pension salary sacrifice amounts above £2,000 annually.

Some of these measures are already legislated, while others are Budget announcements requiring further legislation or detailed implementation guidance.

Source: HM Treasury: Budget 2026.

What did the Autumn Budget 2026 change for financial advisers?

Budget update: 28 October 2026

The Autumn Budget introduced several changes relevant to financial planning, particularly for clients with substantial savings income, investment property, business interests or retirement assets.

Five announcements deserve particular attention:

1. The £20,000 cash ISA allowance has been retained. The government has reversed plans to restrict annual cash ISA subscriptions to £12,000 for people under 65.
2. Savings and property income tax rates will rise further. Rates are now scheduled to reach 24%, 44% and 49% from April 2027, two percentage points higher than previously planned.
3. Capital gains reliefs for business owners are changing. A new Founders’ Relief will offer qualifying entrepreneurs a reduced 10% CGT rate, while the lifetime limit for Business Asset Disposal Relief will fall to £500,000.
4. First-time buyer savings rules are being revised. Certain Lifetime ISA withdrawals will attract a reduced charge, and a new First Time Buyer ISA will launch in April 2029.
5. A new Pension Tax Allowance will be introduced. This is intended to prevent pensioners with income at or near the full new State Pension from facing small income tax liabilities because of the frozen Personal Allowance.

The government also announced a £100 Household Energy Payment for up to 20 million eligible households in England from January 2027, with funding for similar support elsewhere in the UK. The temporary zero rate of VAT on domestic electricity will be extended until 1 July 2027.

These cost-of-living measures may be relevant when reviewing short-term household cash flow, although their significance will vary considerably between clients.

The Budget did not remove the previously legislated April 2027 changes to inheritance tax treatment of most unused pensions.

Source: HM Treasury: Budget 2026, 28 October 2026.

What changes for pensions and inheritance tax in April 2027?

From 6 April 2027, most unused pension funds and pension death benefits will be included in the value of a deceased person’s estate for inheritance tax purposes.

This reform was legislated before the Autumn Budget 2026 and remains an important consideration for clients with substantial pension wealth.

Previously, many discretionary pension death benefits fell outside an individual’s estate for IHT purposes. Under the new rules, unused pension wealth may need to be considered alongside property, savings, investments and other assets when assessing the potential tax liability of an estate.

Exceptions apply, including certain death-in-service benefits and qualifying dependant’s scheme pensions.

Whether an estate pays inheritance tax will continue to depend on the relevant thresholds, exemptions, reliefs and individual circumstances.

What should advisers review with clients?

• Estate exposure: Reassess the potential IHT position of clients whose unused pension funds could materially increase the value of their estate.
• Beneficiary arrangements: Check pension nominations and supporting information where appropriate.
• Retirement income planning: Consider how pension withdrawals and other assets interact with income needs and estate objectives.
• Family circumstances: Establish whether existing arrangements still reflect the client’s intentions.
• Supporting evidence: Record the information considered, the advice provided and the reasoning behind any recommendations.

The appropriate response will vary by client. Bringing unused pensions into the scope of IHT does not automatically mean clients should increase withdrawals or transfer assets.

Did Budget 2026 introduce any other pension death benefit changes?

Yes. The Budget announced the removal of the two-year rule that could result in pension and lump sum death benefits becoming taxable solely because payment was made more than two years after the member’s death.

The measure applies to qualifying payments made on or after 28 October 2026, with legislation to follow.

This relates to the income tax treatment of pension death benefits and should be distinguished from the separate inheritance tax reform taking effect in April 2027.

The government also announced amendments to IHT rules concerning liabilities associated with trust property, applying to relevant deaths and chargeable events from 28 October 2026. Complex trust and estate arrangements should be reviewed with appropriately qualified specialists.

Sources: HMRC: Inheritance Tax on unused pension funds and death benefits and Budget 2026: Personal taxation.

What is the cash ISA allowance from April 2027?

The annual cash ISA allowance will remain at £20,000 for all eligible adults, following the Chancellor’s decision to reverse the planned reduction.

Under the previous policy, investors under 65 would have been restricted to £12,000 in annual cash ISA subscriptions from April 2027. The Autumn Budget 2026 cancels that reduction.

The overall annual ISA subscription allowance also remains £20,000.

For financial advisers, this removes one of the previously anticipated reasons for clients to reconsider their savings allocation before April 2027.

Clients can continue to assess the appropriate balance between cash and investments based on their objectives, time horizon, liquidity requirements and attitude to risk.

The government also announced plans to explore a new incentive for people investing in a stocks and shares ISA for the first time. Its design has not yet been confirmed.

What about the previously announced 22% charge on cash held within investment ISAs?

Earlier HMRC guidance introduced a proposed 22% charge on interest earned on cash held within stocks and shares ISAs and Innovative Finance ISAs. It also introduced restrictions intended to prevent savers from avoiding the lower £12,000 cash ISA limit.

The Autumn Budget has now reversed the allowance reduction, but the published Budget documents do not explicitly clarify the status of all associated technical rules.

Advisers should therefore check updated HMRC guidance before treating those earlier restrictions or charges as final.

Sources: HM Treasury: Budget 2026 and HMRC: September 2026 tax-free savings newsletter.

How will savings and property income tax change in April 2027?

From 6 April 2027, savings income tax rates will increase to 24%, 44% and 49%, following the additional two-percentage-point increase announced in the Autumn Budget.

The 2025 Budget had already scheduled a two-percentage-point increase. The 2026 Budget adds another two percentage points.

Savings income tax rate	2026/27	From 6 April 2027
Basic	20%	24%
Higher	40%	44%
Additional	45%	49%

The new savings rates apply across the UK.

The Personal Savings Allowance remains relevant. Under current rules, basic-rate taxpayers can generally receive up to £1,000 in savings interest without income tax, while higher-rate taxpayers can receive up to £500. Additional-rate taxpayers do not receive a Personal Savings Allowance.

Other reliefs, including the starting rate for savings, may also apply.

What about property income?

Property income tax rates will also increase to:

• Basic rate: 24%
• Higher rate: 44%
• Additional rate: 49%

These rates apply in England, Wales and Northern Ireland from 6 April 2027.

Scottish taxpayers are subject to separate devolved arrangements for relevant non-savings, non-dividend income, including property income.

Which clients may need a review?

These changes may be particularly relevant for clients who:

• Hold substantial cash savings outside ISAs.
• Receive significant interest from savings accounts or fixed-term deposits.
• Own investment properties generating taxable rental income.
• Receive income from several sources and may be affected by the interaction of tax bands and allowances.

Advisers should review the potential effect on after-tax income, investment returns and long-term cash-flow assumptions.

For clients with complex tax arrangements, appropriate specialist input may be required.

Source: HM Treasury: Budget 2026, savings and property income tax measures.

What capital gains tax changes affect business owners in 2027?

The Autumn Budget introduced two important changes to Capital Gains Tax reliefs, both scheduled to take effect on 6 April 2027.

Business Asset Disposal Relief

The lifetime limit on gains eligible for Business Asset Disposal Relief (BADR) will fall from £1 million to £500,000.

The relief provides an 18% CGT rate on qualifying disposals. Under the new limit, a smaller amount of lifetime gains will be eligible for that reduced rate.

This may be relevant for business owners considering retirement, succession or a future disposal.

New Founders’ Relief

The government also announced a new Founders’ Relief for qualifying founders of high-growth, innovative companies.

The proposed relief provides a 10% CGT rate on up to £10 million of lifetime qualifying gains, subject to eligibility requirements.

The detailed design is being developed through technical consultation and subsequent legislation.

What should advisers review?

Advisers working with business-owner clients should consider the timing and structure of potential disposals, the client’s wider financial objectives and whether the relevant eligibility conditions may be met.

Tax consequences will depend on individual circumstances, and specialist tax advice may be necessary.

Source: HM Treasury: Budget 2026, business and enterprise taxation.

What changes for Lifetime ISAs and first-time buyers?

The Autumn Budget announced two changes relevant to clients saving for their first home.

Lifetime ISA withdrawal charges

From 29 October 2026, the Lifetime ISA withdrawal charge will fall from 25% to 20% for qualifying first-home purchases above the existing £450,000 property price cap, where the other applicable purchase conditions are met.

The standard 25% charge continues to apply to other unauthorised withdrawals.

This change may be relevant to clients who have accumulated Lifetime ISA savings but whose intended property purchase exceeds the existing price cap.

First Time Buyer ISA

A new First Time Buyer ISA is planned for April 2029.

The government has announced that it will replace the Lifetime ISA for new savers, while allowing existing Lifetime ISA holders to retain and continue using their accounts.

The new product is expected to offer:

• Annual contributions of up to £4,000.
• A 25% government bonus, paid on qualifying withdrawal.
• A maximum government bonus of £20,000.
• A £450,000 qualifying property price limit.
• No upper age restriction for opening the account.

Advisers should distinguish the changes taking effect now from the proposed replacement product scheduled for 2029.

Source: HM Treasury: Budget 2026, property taxation and ISA measures.

Will income tax thresholds and dividend rates also change?

The UK Personal Allowance remains frozen at £12,570 until 5 April 2031, with relevant thresholds also frozen. Scottish non-savings, non-dividend income tax bands are set separately.

As earnings and pension income increase while thresholds remain fixed, clients may find a greater proportion of their income subject to tax or falling into higher bands.

Advisers should consider this when reviewing retirement income projections, drawdown strategies and clients’ expected after-tax income.

Dividend income tax rates changed from April 2026. The ordinary rate increased to 10.75%, the upper rate to 35.75%, and the additional rate remained at 39.35%.

The Autumn Budget 2026 did not announce a further general increase in those dividend tax rates.

Source: HMRC: Changes to savings, property and dividend income tax.

What does the new Pension Tax Allowance mean for pensioners?

From 6 April 2027, the government plans to introduce a Pension Tax Allowance to prevent pensioners with total income at or near the full new State Pension from having to pay small amounts of income tax because of the frozen Personal Allowance.

Eligible individuals over State Pension age whose total income does not exceed the value of the full new State Pension will receive an automatic tax reduction.

The relief will taper for those with income slightly above that level.

The measure is scheduled to apply from 6 April 2027 until 5 April 2030.

This may be relevant when discussing retirement income and tax administration with lower-income pensioners.

Separately, the Budget confirmed plans to adjust the State Pension Triple Lock from April 2030. The current formula remains in place through April 2029, with a revised approach intended to maintain the value reached relative to earnings.

Advisers preparing long-term retirement projections should monitor the implementation details of both measures.

Source: HM Treasury: Budget 2026, income tax and pensions measures.

When do the pension salary sacrifice changes take effect?

The pension salary sacrifice reform is scheduled to take effect on 6 April 2029, rather than April 2027.

From that date, pension contributions made through salary sacrifice arrangements above £2,000 annually will become subject to employee and employer Class 1 National Insurance contributions on the excess.

Income tax relief on qualifying pension contributions will remain available under the relevant rules.

Although implementation is still several years away, the change may be relevant to longer-term planning for higher earners and clients making substantial pension contributions through salary sacrifice.

For now, advisers can identify clients likely to be affected, explain the future change and revisit its financial implications closer to implementation.

Source: HMRC: Salary sacrifice reform effective from April 2029.

What should financial advisers check with clients after the Autumn Budget?

A structured review can help advice firms identify where action may be appropriate while avoiding unnecessary changes driven by headlines or incomplete information.

The following checklist can be adapted to each firm’s client segmentation, advice processes and compliance requirements.

1. Identify clients affected by the confirmed changes

Consider which clients may be affected by pension IHT reforms, higher savings or property income tax rates, changes to business disposal reliefs, or first-time buyer savings rules.

Prioritisation should reflect the likely significance for each client rather than assuming everyone requires an immediate full review.

2. Revisit client circumstances and objectives

Check whether existing information remains accurate, including income, assets, pension arrangements, intended beneficiaries, liquidity needs and retirement objectives.

Where circumstances have changed, establish whether the existing financial plan needs reconsideration.

3. Update previously communicated assumptions

Some clients may have been preparing for the £12,000 cash ISA limit or the previously announced 2027 savings income tax rates.

Confirm that any earlier communications, calculations and planning assumptions reflect the Budget’s revised position.

4. Review relevant tax planning assumptions

Consider whether financial plans continue to reflect the latest tax rates, allowances, projected income and future implementation dates.

Complex inheritance, trust, business disposal or estate planning arrangements may require specialist tax or legal input.

5. Document the rationale for any recommendation

When a review leads to revised advice, ensure the client’s circumstances, objectives, alternatives considered and supporting reasoning are clearly recorded.

The fact-find, meeting record, suitability report and supporting documents should contain consistent, up-to-date information.

6. Check client understanding

Tax changes can be difficult to interpret, particularly where previously announced measures have been revised.

Explain the implications in accessible language, consider additional support needs and check that clients understand any recommended next steps.

7. Schedule appropriate follow-up reviews

Some clients may need attention immediately, while others may be better served by a review closer to the relevant implementation date.

Record agreed actions, responsibilities and review dates to support timely and proportionate follow-up.

How does Consumer Duty apply to client communications about tax changes?

The FCA’s Consumer Duty requires firms to act to deliver good outcomes for retail customers. This includes providing information that supports consumer understanding and helping customers pursue their financial objectives.

For advice firms, the Autumn Budget is a practical example of where these expectations apply.

A client who reads that pensions are being brought into the scope of inheritance tax may believe they need to withdraw pension funds immediately. Another may have been preparing to move savings after hearing that the cash ISA limit would fall.

Neither response should be assumed to be appropriate without considering individual circumstances and the latest confirmed rules.

Advisers can help clients understand what has changed, assess their personal circumstances and distinguish an urgent decision from one that can be addressed through a planned review.

Firms should also consider how they evidence these conversations, particularly where clients express uncertainty, face complex circumstances or require additional support.

The FCA’s consumer understanding requirements emphasise clear, timely and accessible communications that support informed decisions.

For further information on monitoring consumer understanding and outcomes, explore Aveni’s Consumer Duty hub.

How can advice firms maintain file quality as client reviews increase?

Tax reforms can create additional work across the advice process.

A client conversation may result in an updated fact-find, revised financial planning assumptions, new suitability documentation and further checks by compliance teams.

Each stage depends on accurate and consistent information.

For example, a client may have previously discussed reducing cash ISA subscriptions ahead of April 2027. Following the Budget, their adviser confirms that the planned limit reduction has been cancelled and the client decides to maintain their existing savings strategy.

If the meeting record reflects that decision but the suitability documentation still references the £12,000 limit, the advice file contains outdated information that needs correcting.

This is one of the challenges addressed by Aveni File Check.

File Check is designed to help wealth and advice firms review conversations and supporting documents together, identify inconsistencies or missing evidence, and direct human reviewers towards cases requiring further attention.

Its evidence-led approach supports consistent checking across advice documents while keeping human judgement central to the assessment.

Complex tax planning decisions, including IHT and trust arrangements, remain matters for appropriately qualified advisers and specialists. AI-assisted file checking does not replace that expertise.

For advice firms, the opportunity is to maintain accurate documentation and effective oversight as client review activity increases.

Frequently asked questions about the 2027 tax changes

Will unused pensions be subject to inheritance tax from April 2027?

Yes. Most unused pension funds and pension death benefits will be included in the value of an estate for inheritance tax purposes from 6 April 2027. Exceptions apply, and whether IHT is payable depends on the circumstances of the estate.

Is the cash ISA allowance being reduced to £12,000 in 2027?

No. The Autumn Budget 2026 cancelled the planned reduction. The annual cash ISA allowance will remain £20,000 for all eligible adults.

Will the previously announced 22% charge on cash inside stocks and shares ISAs still apply?

The position requires clarification. Earlier HMRC guidance introduced the charge as part of rules supporting the lower cash ISA limit, but the October 2026 Budget has cancelled that limit reduction. Advisers should check updated HMRC guidance on the associated technical rules.

What are the savings income tax rates from April 2027?

From 6 April 2027, the basic, higher and additional rates of income tax on savings income will be 24%, 44% and 49%. Relevant allowances and reliefs may reduce the amount of tax payable.

What changes for business owners under the Autumn Budget 2026?

From 6 April 2027, the lifetime limit for Business Asset Disposal Relief will fall to £500,000. A new Founders’ Relief is also planned, offering qualifying founders a 10% CGT rate on up to £10 million of lifetime gains, subject to eligibility.

When does the £2,000 pension salary sacrifice limit start?

The change takes effect from 6 April 2029. Employee and employer National Insurance contributions will apply to pension salary sacrifice amounts above £2,000 annually.

Do financial advisers need to review every client’s financial plan after the Budget?

There is no blanket requirement to conduct a full financial review for every client simply because a Budget has been announced. Firms should assess which clients may be materially affected, provide appropriate communications and determine whether an individual review or revised recommendation is necessary.

Preparing for the changes ahead

The 2027 tax changes create several important considerations for UK financial advisers, from inheritance tax and retirement planning to savings income, business disposals and client communications.

The Autumn Budget also demonstrates why advisers need to distinguish confirmed policy from earlier announcements. Some measures have been retained, others revised and new changes have been introduced.

For advice firms, the practical priority is to understand the changes, identify which clients may be affected and ensure that any updated recommendations are supported by clear explanations and accurate documentation.

The Budget provides a reason to review financial plans. The value of financial advice lies in helping clients understand what applies to them and make decisions that remain appropriate for their long-term objectives.

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This article provides general information for financial services professionals and does not constitute personal tax, legal or investment advice. Tax treatment depends on individual circumstances and may change. Advisers should consult the relevant legislation, HMRC guidance and suitably qualified specialists where appropriate.