Tax, wages and prices – what the Budget means for you and your money

Inheritance tax (IHT), which is currently 40%, is usually paid on the value of a deceased person’s assets above a threshold of £325,000.

At present, any money saved in a pension does not count towards this but, from April 2027, inherited pensions will be included.

This is likely to bring more estates into the inheritance tax net, owing to pension savings that have not been spent before somebody dies.

Until now, various exemptions have allowed certain types of property, such as farms and family business assets, to be disregarded in terms of inheritance. However, from April 2026, the rules will ensure some tax will be paid on assets of more than £1m.

Capital gains tax (CGT) is charged on the profit made from the sale of assets that have increased in value, such as second homes or investments.

The chancellor has announced the rate at which CGT is charged will go up, from 10% to 18% for basic rate taxpayers, and 20% to 24% for those who pay at the higher rate. This will match the existing rates for property which will stay the same.