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Financial Planning • February 25, 2026

UK Spring Statement: What Could Be Coming and What It Might Mean for You

Hoxton Blog • UK Spring Statement: What Could Be Coming and What It Might Mean for You

  • Financial Planning
  • Tax Planning

As we approach the UK Spring Statement in early March, the backdrop remains one of fiscal pressure, cautious economic growth, and continued political focus on fairness and revenue sustainability.  

In that environment, major structural overhauls are less likely than targeted adjustments to reliefs, allowances, and preferential tax rates. 

For many clients, particularly business owners, internationally mobile families, and those with significant UK assets, it is often these technical refinements that have the greatest long-term impact.  

A change in a relief threshold, a reduction in an allowance or a modest rate increase can materially affect succession planning, business exit strategy and income extraction decisions. 

Recent fiscal events suggest a clear direction of travel: narrowing perceived advantages in certain areas of capital taxation, tightening reliefs, and gradually aligning preferential rates more closely with mainstream tax treatment. Understanding that broader context helps you interpret not just what may be announced, but why. 

The areas below reflect policy developments already announced for implementation from April 2026, alongside themes that may continue to evolve in the upcoming Spring Statement. 

This article is intended as general information only and does not constitute personal tax or financial advice. Individual circumstances vary, and professional advice should always be sought before taking action. 

Inheritance Tax on Agricultural and Business Assets

From April 2026, changes to Agricultural Property Relief and Business Property Relief will introduce a combined £2.5 million allowance per individual for assets that qualify for 100% relief. 

In practice, this means that qualifying agricultural and trading business assets up to £2.5 million can continue to benefit from 100% relief from Inheritance Tax. Above that level, relief will reduce to 50%, resulting in an effective Inheritance Tax rate of 20% on the excess value. As with other IHT allowances, it has been confirmed that unused amounts are transferable between spouses or civil partners. 

For many families, particularly those with farms or owner-managed trading businesses, this represents a meaningful shift. Historically, qualifying assets could often pass entirely free of IHT provided conditions were met. While the relief may appear generous, the introduction of a defined 100% relief cap changes several planning assumptions. 

First, accurate valuations become critical. Where exposure may now arise above £2.5 million, robust and defensible valuations of land, business interests, and partnership shares are essential. 

Second, liquidity planning becomes more important. An effective 20% charge on value above the allowance could create funding pressures on death where assets are illiquid. Families may need to consider how a liability would be funded without forcing a sale of core business or agricultural assets. This also raises practical questions about marketability: in reality, who would be a willing buyer for part of a private trading business or a specialised agricultural holding at short notice, and on what terms?  

Third, succession planning discussions become more structured. Lifetime gifting strategies, share restructures, trust arrangements, and appropriate protection planning may all require review in light of the revised framework. 

For internationally mobile families, UK situs agricultural or business assets remain within the scope of UK IHT. Broader changes to the UK’s approach to domicile and long-term residence in recent years mean that cross-border families should take particular care to understand how UK IHT applies to their wider estate. 

Dividend Tax Increases

Dividend tax rates are scheduled to increase by 2 percentage points from April 2026. The ordinary rate will rise from 8.75% to 10.75%, and the higher rate from 33.75% to 35.75%. 

For portfolio investors holding shares outside tax wrappers, this increases the marginal cost of dividend income. However, the more significant impact is often felt by owner-managed businesses, where remuneration is structured through a mix of salary and dividends. 

Over time, the differential between salary and dividend extraction has narrowed. Further increases reinforce that trend and may prompt a reassessment of remuneration strategy. 

For business owners, this may involve reviewing: 

  • The balance between salary and dividends 

  • The role of company pension contributions 

  • Use of allowances across family members 

  • Timing of distributions relative to personal tax thresholds 

While such changes are often framed politically in terms of fairness between PAYE earners and those extracting profits via dividends, the practical implication is that business owners need to reassess their extraction strategy within a broader financial planning framework.

Capital Gains Tax and Business Asset Disposal Relief

From April 2026, the Capital Gains Tax rate applying where Business Asset Disposal Relief is available will increase from 14% to 18%. The lifetime limit for Business Asset Disposal Relief remains £1 million per individual. 

Historically, the predecessor to Business Asset Disposal Relief, Entrepreneurs’ Relief, offered a lifetime limit of £10 million at a 10% rate between 2011 and 2020. The current structure represents a significant tightening compared to the earlier regime. 

As the Business Asset Disposal Relief rate moves closer to mainstream CGT rates, the differential narrows. For founders and shareholders contemplating a business sale, this increases the importance of advance planning. 

Key considerations may include: 

  • Shareholding structure and qualifying conditions 

  • The use of employee share schemes such as EMI 

  • Family ownership structures 

  • Timing of disposal relative to residency status 

It is important to note that relocating abroad as part of an exit strategy involves complex interaction with the UK’s Statutory Residence Test and temporary non-residence rules. Decisions around residence must reflect genuine commercial and lifestyle objectives, not simply headline tax rates, and require careful professional advice. 

Venture Capital Trust Relief

From April 2026, upfront income tax relief on Venture Capital Trust investments is scheduled to reduce from 30% to 20%. 

Venture Capital Trusts continue to offer tax-free dividends and exemption from CGT on disposal, subject to minimum holding periods and qualifying conditions. A reduction in upfront relief changes the entry economics but does not necessarily remove their relevance. 

Venture Capital Trusts may still be suitable in certain circumstances for: 

  • Individuals with significant income tax exposure 

  • Investors comfortable with higher risk, smaller company investments 

  • Those who understand liquidity constraints and long holding periods 

It is also worth noting that Enterprise Investment Scheme investments continue to offer 30% upfront income tax relief, albeit with different risk profiles and qualifying criteria. 

As always, tax relief should be viewed as one component of a broader investment decision, not the sole driver.

The Bigger Picture

Taken together, these measures reflect a continued refinement of the UK tax landscape rather than a single dramatic shift. Reliefs remain available, but thresholds are more clearly defined, and preferential rates are gradually converging with mainstream taxation. 

For clients with: 

  • Significant agricultural or trading business interests 

  • Anticipated business exits 

  • High levels of dividend income 

  • Cross-border exposure 

the cumulative effect can be meaningful. 

However, it is important not to make premature decisions based solely on anticipated Spring Statement commentary. Tax legislation is subject to detailed drafting, consultation, and amendment before full implementation. 

Planning With Perspective

Tax policy evolves. What remains constant is the value of structured, long-term planning. 

For families with farms or trading businesses, the focus may now be more firmly on valuation discipline, liquidity modelling, and intergenerational structuring. 

For business owners, remuneration and exit strategies should be reviewed as part of a comprehensive financial plan rather than in isolation. 

For internationally mobile clients, residence, domicile, and asset location require careful coordination across jurisdictions. 

If you would like to review how these confirmed and anticipated changes may affect your position, speak to your Hoxton adviser or contact client services. A proactive review can provide clarity and control in a changing tax environment. 

About Author

Lois Vallely

February 25, 2026

Lois Vallely is Head Copywriter at Hoxton Wealth, where she leads the firm’s written content across marketing, client education, and thought leadership, with a particular focus on cross-border financial planning, pensions, tax, and estate considerations for international clients.

Before joining Hoxton Wealth, Lois spent several years in financial journalism, most notably as Chief Reporter at Money Marketing. There, she covered the UK advice and wealth-management sector in depth, producing features, analysis, and commentary on adviser businesses, industry consolidation, technology, and the evolving role of financial planning.

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