Pumpkins, properties and pensions: A Family Lawyer’s warnings ahead of the Autumn Budget

At this time every year, as the evenings start to draw in and the leaves become crunchy underfoot, attention turns to debates over pumpkin-spiced latte and when is too early for Christmas food and decorations to enter the shops ( before mid-November is the obvious answer, no?).

Alongside these familiar rituals, another date looms large on the late October calendar — and this year it also feels like the annual household haunting is being anticipated earlier than usual. Households are already bracing themselves for shadows at the door, demands for candy from hungry mouths, ready for more tricks than treats. 

Yes, the Autumn Budget is already monopolising column inches – and professional time — as attention turns to forecasts, predictions and advice on how best to mitigate the likely impact of any tax changes. (In fact it has now been confirmed that the Budget will take on 26 November, but the analogy requires some poetic licence here.) The Government having promised as part of its manifesto pledges not to increase taxes on working people, has removed from its armoury any rises in income tax, employees’ national insurance or VAT. But with the National Institute of Economic and Social Research estimating a £50bn shortfall in public finances, with the cost of long-term government borrowing hitting a 27-year high this week and with U-turns on planned cuts in welfare and winter fuel payments, speculation is rising about how the Chancellor might plug the gap.

Colleagues in our Private Client teams have considered separately some of the possibilities:

Sarah Wray has looked at some of the speculation around inheritance tax changes (Update on the Autumn 2025 Budget speculation for farmers, landowners and business owners), including perhaps introducing a lifetime cap on tax-free gifts. Julia Cox has looked at possible CGT changes and other pre-budget planning (Autumn Budget: possible CGT changes and pre-budget planning), including limiting the value of properties qualifying for CGT exemption as a principle private residence. Other possible tax changes have been mooted, including cutting the 25% tax-free pension lump sum drawdown, stamp duty changes or an overhaul of council tax and replacement with a possible mansion tax.

Why does all of this matter to a family lawyer? It matters in a number of ways:

• General terms - Increased fiscal strain can exacerbate the financial strain that is often already present when one household economy has to stretch to accommodate two households and uncertainty can make planning difficult. 
• Capital terms - The family lawyer is concerned with the net asset position; how are the assets, net of tax, to be divided?  Anticipated future capital needs are also important to predict with as much accuracy as possible and if there are changes to stamp duty, there will be changes in sums required to rehouse the parties to a marriage. Perhaps more importantly, if there are significant changes to property taxes (such as to stamp duty, CGT on the main home, an overhaul of the council tax system or similar), this is likely to have an impact on house prices. Understanding the full impact of applicable taxes is critical and a moving target of uncertain tax charges – and so also on the property market - makes that harder. 
• Income terms - If the income needs of both parties are to be appropriately accommodated across two households, it is necessary to have as clear a picture as possible of net income and budget needs. It seems that income taxes are likely to be immune, but unknown household taxes will have an impact on family budgets particularly if, for example, the council tax system is overhauled and replaced with a property tax.  None of this is made simpler by already unpredictable budgets given that inflation is currently running at nearly double the Bank of England’s target.
• Retirement planning - Cashflow modelling can be an important part of financial planning after divorce. Where such projections have been based upon an assumption that a 25% tax free lump sum can be drawn from a pension upon retirement, the position may look very different if that possibility becomes tax disadvantageous following tax changes. 
• Wealth planning - The desire to protect and preserve dynastic wealth sits firmly at the juncture of family law and private wealth concerns. Possible inheritance tax changes, and the tax treatment of trusts, are both relevant when considering ways in which intergenerational wealth is passed down. In turn, the need to protect family capital from family breakdown comes sharply to the fore. A private client lawyer’s tax driven advice might be a family lawyer’s worst nightmare – see for example Mrs Standish’s arguments in Standish v Standish. Both disciplines are usually needed to safely navigate the passing of wealth tax efficiently with appropriate family law protections deployed.

Anticipating inheritance tax changes last year, the lead up to the 2024 Autumn Budget saw a spike in enquiries about ways in which lifetime gifts could be made to children whilst also ringfencing the capital so far as possible from potential claims by romantic partners, be they cohabitants or spouses. Our Gen Z survey supported this with 68% saying it is likely they will receive financial support from their parents and almost half being open to a Cohabitation Agreement or Prenuptial Agreement: gen-z-report-final-2025.pdf

So whilst speculation mounts in the coming months prior to 26 November’s Budget, please heed the family lawyer’s warnings:

1. to those undertaking estate planning, not to take precipitative action without consulting a family lawyer;
2. to those who have already settled their cases, to bear in mind the family courts have repeatedly made clear that tax changes are foreseeable and so they will not qualify as a Barder event that might justify the setting aside of a financial order made upon divorce; and 
3. to those who are still negotiating divorce settlements, to accept it may be necessary to revisit and revise one’s case about net capital, capital needs, net income and income needs after the Budget.

Until then, enjoy the crunchy leaves and cosy evenings, embrace all the Autumncore and don’t go running too scared of what may follow in ‘Spooky Season’.