The Chancellor has now outlined the government’s latest Autumn Budget. Described as a Budget built on “fair and necessary choices,” it signals a shift in tone and policy direction, with changes that will have implications for investors, business owners and advisers alike.
The decision to raise the annual investment limit for Enterprise Investment Scheme (EIS) and Venture Capital Trust (VCT)-backed companies to £10 million, alongside an increase in the lifetime company investment cap to £24 million, marks a welcome step forward. It sends a strong signal of confidence in the role that private capital can play in driving the next generation of UK scale-ups.
While the flexibility of these increased limits should be applauded, the surprise reduction in up-front income tax relief on VCT investments from 30% to 20% is disappointing. That said, there is still a clear opportunity for advisers and clients to take action - investors can continue to access the full 30% income tax relief through the current tax year. Meanwhile, EIS remains unchanged and continues to offer 30% income tax relief, further reinforcing its value as a tax-efficient route to support innovative UK businesses.
A further key headline was the confirmation that IHT thresholds will now remain frozen until at least April 2031. With the standard nil-rate band (£325,000) and residence nil-rate band (£175,000) both unchanged, more estates will be caught by fiscal drag over time. As asset values continue to rise, the number of clients exposed to the 40% IHT rate is likely to increase - making early, effective estate planning more important than ever.
For estate planning, the Budget offered positivity on Agricultural Property Relief (APR) and Business Relief (BR). The Chancellor has now made the £1 million tax-free allowance transferable between spouses. This has made it simpler for individuals to pass on wealth. The Chancellor also stated that even if a spouse is already deceased, the remaining spouse can benefit from their £1m allowance as they currently do with the other IHT Nil Rate Bands.
We also welcome the government’s commitment to address skills shortages in the renewable energy and technology sector. The £187 million Techfirst digital skills package and £182 million investment in engineering, alongside the creation of Technical Excellence Colleges, signals a strong long-term focus on building capability in renewable infrastructure.
As one of the UK’s leading investors in solar and wind generation with more than 53 operational sites, Blackfinch Energy is well positioned to benefit from these sector-wide advancements. More skilled workers mean more resilience, more innovation and stronger long-term potential.
Below is a summary of the key changes from the budget that impact our investment services, and what the impact is. Please do speak with your regional Business Development Manager who will be happy to help you assess any client scenarios, opportunities, or challenges you are experiencing as a result of the latest budget announcement.
Key takeaways
- Income Tax relief available through VCTs to drop from 30% to 20% from April 2026.
- VCT and EIS annual investment limit to be increased to £10m and the lifetime limit to be increased to £24m.
- The current inheritance tax thresholds are due to be frozen. The current threshold of £325k had already been frozen until 2030, and now will remain there until at least April 2031. IHT Thresholds = £325k per person + £175k residential relief per person. If married this doubles.
- The chancellor confirmed that the new £1 million tax-free threshold for Agricultural Property Relief (APR) and Business Relief (BR), due from April 2026, will be transferable between spouses and civil partners. Also available to use where the spouse is already deceased.
- Tax on dividend income will increase by 2 percentage points. The ordinary rate will rise from 8.75% to 10.75%, and the upper rate from 33.75% to 35.75% from April 2026. The additional rate will remain unchanged at 39.35%.
- From April 2027, income tax rates on savings and rental income will rise by two percentage points. Once in effect, basic-rate taxpayers will pay 22%, higher-rate taxpayers 42%, and additional-rate taxpayers 47%.
What does this mean for Blackfinch Investments?
- 30% income tax relief remains until April 2026.
- Relief will drop to 20% from April 2026.
- Increased investment caps expected to drive further company growth.
- Dividends still free from tax.
- Tax free growth stays the same.
- Annual and lifetime company investment limits increased.
- Supports larger funding rounds and growth strategies.
- 30% income tax relief remains available as do the other tax breaks with an EIS.
- IHT thresholds remain frozen until 2031 making effective estate planning even more crucial.
- Gifting rules unchanged; no lifetime cap introduced.
- No change to the £1 million allowance at full 40% IHT relief for unquoted BR companies and now transferable between spouses.
- Potentially can use a deceased spouse’s allowance to benefit from £2m at full relief. To be confirmed.
- Remains a core solution for clients seeking IHT efficiency.
As taxes continue to rise and allowances stay frozen, more clients will feel the impact of fiscal drag on their income, investments and estates. That will naturally drive stronger demand for practical, well‑timed tax planning. For advisers, this creates a clear opportunity to add real value by helping clients use the tools still available, and by positioning tax‑efficient investing within wider long‑term plans.
Blackfinch is ready to support you in those conversations. Whether you’re reviewing client strategies ahead of the VCT relief change, exploring EIS as part of income tax planning, or strengthening estate planning where IHT exposure is growing, we’re here to help you act with confidence.
Your regional Business Development Manager can provide bespoke training as well as case‑by‑case technical support. As an adviser you also have access to our full range of client planning resources and insights on our website, so you can continue delivering positive outcomes for clients in a more demanding tax environment.
