British finance minister John Healey is due to deliver his first budget on 28 October 2026, facing pressure to raise “billions of pounds” to offset higher borrowing costs and fund Prime Minister Andy Burnham’s social-care and defence spending plans, according to Reuters reporting published 7 September 2026. Reuters lays out the menu of wealth-adjacent tax options reportedly in play — reform to capital gains tax, to property taxes, and even a new annual wealth tax — but none of them has been decided, and Burnham has already ruled out scrapping stamp duty or council tax at this Budget specifically. What is not in doubt is the fiscal backdrop: Britain raised £1.1 trillion in tax in the 2025/26 financial year, against roughly £24 billion of headroom in March’s forecasts that many economists now think has narrowed further.
That undecided menu of options is not the whole story. Two separate categories of evidence, both dated the same week as the Reuters report, show that anticipation of an uncertain Budget — layered on top of an inheritance-tax (IHT) change that has already taken effect — is already reshaping decisions among foreign investors and family-owned business owners, well before Healey stands up on 28 October.
On the tax-options side, Reuters reports capital gains tax raised £24 billion in 2025/26 at rates of 18% and 24%, below income-tax rates of 20% and 40% — a gap that defence minister Wes Streeting and the left-leaning IPPR have both proposed closing. The University of Warwick’s Centre for the Analysis of Taxation estimated in August 2025 that a comprehensive CGT reform could raise an extra £11 billion a year, though Britain’s own tax office separately estimated that raising the higher CGT rate by 10 percentage points could instead cost up to £3.6 billion a year through increased avoidance. On wealth specifically, Oxfam and Tax Justice UK have called for a 2% annual levy on assets over £10 million; asked directly in a July 2026 podcast, Burnham said he wanted time before deciding but would not rule it out. The Institute for Fiscal Studies, for its part, has warned that annual wealth taxes are hard to implement — most developed countries that tried one abandoned it — because valuing assets like private businesses is difficult and because taxpayers can emigrate or otherwise avoid it, making the revenue hard to predict.
Away from the policy menu, family-owned manufacturers are already responding to a tax change that is no longer hypothetical. A joint report from Make UK, the manufacturers’ trade body, and accountancy firm Bishop Fleming — based on a survey fielded in May and June 2026 and reported on 7 September by Business Matters — found that 22% of family-owned manufacturers surveyed are weighing a sale to a foreign buyer because of inheritance-tax changes, with a further 18% considering a sale to a UK buyer. Among family-owned respondents, 78% said they were worried about the effect of the IHT reforms on succession planning. The change in question cut business property relief to 50%, effective 6 April 2026, after the government raised the combined relief threshold to £2.5 million in December 2025; the government estimates it affects about 2,000 estates a year. The report itself warns the changes raise a real risk that “ownership and investment decisions become driven primarily by tax considerations rather than commercial objectives,” and that this “could lead some manufacturers to sell their businesses to third parties… or divert capital away from productive investment” — with Family Business UK chief executive Neil Davy adding that the findings add to “a growing body of evidence” that the business property relief changes are already having “real-world consequences.” A government spokesperson, asked to respond, defended the Chancellor’s broader business-support record (business rates cuts, a capped corporation tax rate, a £4 billion SME finance boost) without directly disputing the survey’s findings; CBI Economics has separately argued the reform could end up costing the exchequer more than it raises.
That family-business signal has a thinner echo on the investor side: the Telegraph reported on 7 September, in a piece largely behind its paywall, that foreign direct investment into Britain has fallen 21% — its own published sub-headline’s figure — with the UK “losing ground” to other countries “after Labour tax raids.” No other outlet was independently corroborating that specific figure as of this writing, so it is carried here as a single-source, headline-level data point rather than a verified statistic — but its direction lines up with what the family-business survey shows from a different angle: two distinct groups, evaluated by two different organisations using two different methods, both showing tax-driven caution about UK exposure in the same news cycle.
Zagdim’s View — The detail worth holding onto is the sequencing: none of the specific tax rises Reuters lists has been decided, and the Budget itself is still seven weeks away as of this reporting — yet the family-business survey shows exit-shaped decisions already being made off the back of a change that predates this Budget entirely. That is a distinct claim from “taxes might go up in October,” and it is the more measurable one: a fifth of family-owned manufacturers surveyed say they are already weighing a sale to a foreign buyer specifically because of the IHT change already in force, not because of anything Healey has yet to announce. For anyone tracking UK exposure — as a foreign investor, or as a family business owner weighing succession — the open question the Budget will answer is whether that list of options on Reuters’ menu adds a second wave of uncertainty on top of the first, or removes it.
References
Reuters – Options for UK finance minister Healey to tax wealth in October’s budget / The Telegraph – Foreign investors sour on Britain after Labour tax raids / Business Matters – Inheritance tax changes push family manufacturers to sell
