Budget 2026: What to Expect If You’re an Investor

If you hold shares, funds or an ISA, the Budget on Wednesday 28 October could hit closer to home than you’d think. Chancellor John Healey has ruled out raising income tax, National Insurance or VAT, so he has to look elsewhere for money.

And “elsewhere” usually means the money your money makes.

Here’s what’s already changed, what’s being talked about, and what you can sensibly do before Budget day.

Why investors are in the spotlight

With the main taxes off the table and corporation tax expected to stay at 25%, attention is turning to capital gains, property, pensions and tax reliefs. Healey also needs to rebuild his financial buffer after a sharp spike in government borrowing costs ate into it.

Prime Minister Andy Burnham has also hinted in the past that the UK taxes work more heavily than wealth, which could point to higher taxes on investments.

What’s already changed (or on the way)

Before we get to the rumours, here’s where things stand today.

There’s another change hidden in the ISA rules. To stop people dodging the cash ISA cut, uninvested cash sitting in a stocks and shares ISA will be taxed at 22%, and you won’t be able to hold all of your ISA in money market funds.

What could change on 28 October?

None of this is confirmed. But here’s what the experts are watching.

Capital gains tax: the big one. The main rate went up from 20% to 24% in October 2024. Some in Labour want it to match income tax rates, but no specific proposals have been announced. Most commentators think a moderate rise is more likely than full alignment, perhaps with a break for people who hold investments for longer. Law firm Osborne Clarke suggests one option could be a 32% rate, alongside better reliefs for people investing in businesses.

Dividends. The £500 tax-free allowance is already tiny (it was £5,000 not long ago), so cutting it further seems unlikely. A more likely move would be nudging dividend tax rates closer to income tax rates.

ISAs and pensions. These come up in almost every round of Budget gossip. Nothing specific has been floated for investors this time, but it’s worth keeping an eye on.

What it could mean for the stock market

A big jump in capital gains tax wouldn’t just hit your own tax bill.

Saxo warns that bringing it fully in line with income tax would be a major shock for UK shares across the board, with investment platforms, fund managers and life insurers among the most exposed.

That’s another reason most people expect something more modest. But markets can move on Budget day, so don’t be surprised by a few wobbles.

What you can do now

1. Use your ISA allowance. Anything inside an ISA is free from capital gains and dividend tax, whatever happens on Budget day. If you have investments outside an ISA, you can sell them and buy them back inside one, often called “Bed and ISA”, to move them into the tax-free wrapper over time.
2. Use your £3,000 capital gains allowance. It’s small, but it resets every tax year and you lose it if you don’t use it.
3. Think as a couple. Married couples and civil partners can move investments between each other without triggering capital gains tax, which means you can use both of your allowances.
4. Don’t panic-sell. Selling everything before Budget day to lock in today’s rates could leave you with a tax bill now for a change that never happens, and out of the market if prices rise. Budgets sometimes include rules that catch transactions rushed through beforehand too.
5. Check your cash. If you hold a lot of uninvested cash in a stocks and shares ISA, be aware of the 22% charge coming in from April 2027.
6. Keep the long view. Tax rules change. Good investing habits, like spreading your money around and staying invested for the long term, matter more than any single Budget.

The bottom line

Capital gains tax is the area to watch, but a modest rise looks more likely than a dramatic one. The changes you can count on are already on the way: a smaller cash ISA limit and new rules on cash in stocks and shares ISAs from April 2027.

We’ll break down exactly what was announced straight after 28 October. If you’re weighing up selling investments, how much to keep in ISAs, or how your portfolio fits your wider plans, book a free, no-obligation chat with one of our advisers.

This article is for education only and isn’t financial or tax advice. Budget predictions are speculation until announced, and tax rules depend on your circumstances and can change. The value of investments can go down as well as up.

Speak to a regulated financial adviser before making investment decisions.

Sources

• Autumn Budget 2026: Potential tax changes and stock market sector impact, Saxo
• Autumn Budget 2026: What can investors expect?, The Armchair Trader
• Autumn Budget 2026 predictions, Grant Thornton
• Autumn Budget 2026: what tax measures can the UK expect?, Osborne Clarke
• Autumn Budget 2026: What UK Agency Directors Should Expect, Alto Accounting