There are no crystal balls for a Budget announcement

As we approach the Budget Announcement being made by Rachel Reeves on 26 November, social media is alive with suggestions about what will be announced and what will be changing as the government attempts to reduce the c.£20bn hole in public finances.

The only certainty we have is that there will be a Budget Announcement on 26 November and it will include steps that will see public revenues rise, with the Chancellor noting that it is those with the broadest shoulders that will be paying their fair share.

At AAB, we do not fan the flames of speculation. Instead, we have our tax experts primed to review any changes targeted at a specific tax or relief, and they will be available with detailed knowledge from the 26^th November to discuss the impacts of changes on you and your businesses. A short summary is included below of some of the more relevant matters that are being flagged as potentially changing.

LLPs and Partnerships

During late October, there has been high speculation that the Chancellor will introduce Employer’s NIC on partner profit shares of LLPs conducting business activities, with speculation that partnerships may also be exposed to this change.

We have a number of partnership structuring experts within AAB who have been the trusted advisers to many businesses that have chosen an LLP or partnership as their favoured trading structure for many reasons, not just to prevent an NIC liability arising on profits.

This team will be tracking the Budget Announcement closely and reaching out to those we already provide advice to with a view to understanding any concerns these rumours have raised. Additionally, our experts will invest time in reviewing the details of any announcement in this area on the 26^th and will be available to run models and discuss:

• Whether such structures remain commercially viable after any announcement concerning NIC, and
• What alternatives can be more commercially viable should there be a change announced.

Given the current spotlight on such structures, this can be a timely moment for LLP’s and partnerships to consider if their operating structure is still fit for purpose.

Capital Gains Tax (‘CGT’)

It is anticipated that there will be another rise in the rate of CGT, taking us past the higher rate of 24% that is currently in place. A rate rise to match that of Income Tax is not anticipated, as that would be detrimental to entrepreneurship.

Additionally, there has been speculation that the uplift in an asset’s cost for CGT purposes on death may be removed, which will prevent an asset within the CGT net from being inherited with a market value cost. Instead, death will be treated as crystallising a disposal for CGT purposes.

Second Property Taxes

Those with additionally owned properties can expect continued changes to the tax which additional property owners face. In recent times, we have seen double Council Tax, limited interest relief and also additional stamp taxes on acquisition. This could also extend to those with ‘mansions’ facing an increased level of tax on the sale of their mansion.

IHT Changes

The highly publicised changes to Business Relief and Agricultural Relief creep closer to being introduced in April 2026, as does the introduction of unused pensions to IHT, with April 2027 currently being the relevant date for this being introduced. There is speculation around some amendments to what has already been announced in this space and increased limitations on gifts during lifetime, which are commonly used to reduce an IHT liability.

Within AAB, our teams of specialists are ready to analyse any changes, look beyond the minimal content of the Budget Announcements and be able to advise you on how these changes will affect your tax position.  Please do not hesitate to get in contact with a member of our team or your usual AAB contact.