Brits could be facing devastating £200,000 hit if they aren't prepared ahead of budget

The speculated changes Chancellor Rachel Reeves is expected to make in the budget are greatly varying, but Brits are being urged to put some general safeguards in place

The Autumn Statement on October 30th is where Chancellor Rachel Reeves is expected to make a range of announcements and changes from potential tax hikes to confirming the state pension increase next April. Prime Minister Sir Keir Starmer has already warned the changes will be “painful”.

Experts have suggested the most likely changes will come be a capital gains tax rise and changes to tax relief on pensions with the total hit rising to around £200,000 according to Hargreaves Lansdown. While a majority of these changes are out of the control of individual households, there are some safeguards they can put in place to ease the blows.

The capital gains tax rise is only expected to affect 1% of UK taxpayers according to Telegraph Money as it’s paid on profits of over £3,000 in a year on the sale of shares, property that isn’t your main home or other assets. The rate is currently 10% for basic-rate taxpayers, 18% for higher and 20% for additional.

To lessen the blow from any increases to these rates, Gianpaolo Mantini, partner at Saltus Financial Planning, recommended Brits looking to sell may be better off doing so before the budget. He also highlighted the allowances, such as a tax-free transfer of assets to spouses, which people can utilise even after the potential changes are made.

Predictions for what exactly will happen to the rates include being levelled with income tax which sits on 20% for basic, 40% for higher and 45% for additional. Others claim it will only be increased by 10% or less based on HMRC analysis or the rules around CGT strictly after death could shift.

The Chancellor has assured working people won’t be detrimentally affected, which is why many experts are expecting a tax change that will indirectly affect the majority of the population. Many note that it’s unlikely she will uplift the frozen personal allowance for income tax, which is only due to change in 2027.

Money moguls at the Telegraph advised Brits to try dip into a lower income tax bracket if they're teetering on the edge of a higher one. This can be done through the likes of the salary sacrifice scheme.

Inheritance tax could also be on the chopping block as experts at Hargreaves Lansdown detailed two potential outcomes; reducing or abolishing the nil-bad rate or reducing or abolishing the resident nil band rate. Both of these tax-free allowances could force Brits to drastically rethink their estate planning to avoid the brutal 40% tax rate.

Gianpaolo said: “The reason the Tories brought in the residential nil-rate band was widespread dissatisfaction that more and more estates were falling into the IHT threshold so Labour may just simplify the calculator.”

The second potential change is a shift in the allowances around passing items to your civil partner or spouse. The experts noted on this front that it should prompt those who haven’t to get their estate planning in order, adding: “Effective planning is key,” with the aim of utilising all of the tax-free allowances you could be due.

Finally, the possibility of a flat rate of 30% tax relief on workplace pension contributions will likely prove controversial. Sarah Coles, head of personal finance at Hargreaves Lansdown, recommended: “If you are worried about changes to the tax relief regime then it is a good idea to make the most of the system as it currently stands by making a contribution to your pension in the coming weeks.”