The government has published its Tax Update 2026, mapping out consultations, reviews and potential changes under the themes of simplification, modernisation and fairness. For many, this will feel familiar, with much of the update building on announcements made at Autumn Budget 2025, as proposals move into draft legislation or consultation.
We explore the key points below…
Capital Gains Tax: gift relief for business assets
One of the more significant developments is the progression of draft legislation to modernise Gift Hold-Over Relief.
The relief already allows Capital Gains Tax (CGT) to be deferred when qualifying business assets are gifted, with the recipient inheriting the original base cost. This can be particularly valuable when passing business assets between generations as part of succession planning.
The proposed changes focus on gifts of shares or securities in trading companies or groups. Under the current rules, relief can be restricted where a company holds non-trading assets, limiting the amount of gain that can be held over.
The draft legislation aims to relax some of these restrictions and broaden the scope of qualifying assets where certain conditions are met. If implemented, this could make the relief more accessible and allow more gains to be deferred than under the current rules.
ISA reforms: what is actually changing
Cash ISAs remain entirely tax-free.
However, the government is consulting on the treatment of cash held within Stocks & Shares ISAs. The proposals are aimed at individuals using investment ISAs primarily as cash accounts rather than for long-term investing.
From 6 April 2027, interest earned on uninvested cash held within a Stocks & Shares ISA will be subject to a 22% tax charge, as part of wider changes to ISA rules.
While further detail is still emerging, anyone holding significant cash balances within a Stocks & Shares ISA may wish to monitor developments as further details emerge.
Other developments
- Self Assessment payments: HMRC is consulting on changes to how Self Assessment tax payments are paid. There are proposals for individuals with PAYE income to pay more of their forecast tax liability in-year through PAYE (potentially from April 2029), alongside a separate consultation on moving payments on account away from six-monthly instalments towards more regular payments
- VAT: A consultation has been launched on introducing a zero rate for land intended for social housing
- Employer expenses: HMRC is also reviewing of Benchmark Scale Rates and Overseas Scale Rates used for employer expense claims
Where things stand
| Measure | Status | Target date |
| CGT Hold-Over Relief for business gifts | Draft legislation published | TBC |
| ISA cash charge (Stocks & Shares ISAs only) | Subject to consultation | April 2027 |
| Self Assessment – more frequent payments | Consultation ongoing | April 2029 (proposed) |
| VAT zero rate – land for social housing | Consultation open | TBC |
What this means for you
HMRC’s update confirms that a range of measures and potential changes are being explored, so it is worth monitoring developments, particularly where they may affect your particular circumstances.
More broadly, this update reinforces the continued direction towards a more digital, real-time tax system – with measures from 2025 now moving steadily towards implementation.
If you would like to understand how any of these changes could affect you or your business, our tax team is happy to help. Get in touch with tax manager, Sinead Watson, by clicking the button below.
