ISSUE NO. 55 · TUESDAY 20 OCTOBER 2026

A family handover taxed at 45% instead of 24%, 10,500 estates pulled into inheritance tax, and 65 profit warnings in a single quarter

Healey is reportedly weighing an income tax charge on owners who hand a company down to their children, almost doubling what the handover costs them.

It is not the only exit being closed. From April 2027 most unused pension pots sit inside inheritance tax, and the government’s own figures put 10,500 estates into the net that would have owed nothing. Neither change touches what anyone earns. Both tax the moment something is passed on — the moment people spend decades planning around.

Below: the handover charge, profit warnings at a two-year high, the estates that owed nothing, four numbers, the diary and one calculator.

Lead

Owners hand a company down at 24%. The Chancellor is reportedly looking at charging them 45% instead.

The route is narrow: rather than sell to their children, an owner converts their stake into redeemable shares and the company buys them back out of its own profits. The firm stays in the family and the payout counts as a gain, not as earnings, which is the whole saving. Charge income tax instead and the bill almost doubles, landing on owners at retirement, exactly when the route is used. Accountants warn it could finish off family firms and deter new ones. It would follow Rachel Reeves’s inheritance tax change for family businesses, expected to raise £300m a year, with the Treasury after hundreds of millions more. Read the full story →

The Numbers

Four numbers. The index closed higher on Friday, the gilt has given back a little of September, and two come from today’s stories.

More News

London-listed companies issued 65 profit warnings over the summer, and housebuilders have now passed their 2008 count.

EY’s tally puts the third quarter at 65 against 59 in the second, the highest in nearly two years; the last quarter to beat it managed 71, in late 2024. A majority blamed geopolitical uncertainty and 38% named the Middle East conflict. Construction and household goods led with eight, six of them from listed housebuilders — taking builders to 14 for the year, against the 10 they issued at the peak of the 2008 crisis. Taylor Wimpey, Vistry and Persimmon were among them. Jo Robinson of EY reads it as structural, not cyclical: policy-linked warnings no longer wait for fiscal events. Read the full story →

From April 2027 most unused pension pots count for inheritance tax, and the bill can fall due before the money arrives.

On the government’s own estimates, around 10,500 estates that would previously have owed nothing will pay in 2027 to 2028, a further 38,500 will pay more, and the average bill rises by roughly £34,000. Steve Gauke of Provira treats those as estimates, but the timing worries him either way: an inheritance can take six to 12 months to arrive, the tax is due by the end of the sixth month after a death, and executors usually settle it before probate. Pension money adds its own snag: beneficiaries may reach only about half the affected benefits at first, for up to 15 months. Asset-rich, cash-poor families are worst placed. Read the full story →

The Brief

• Nscale Data Centre Loses Microsoft Ahead of Its IPO — Power worries cost Loughton its anchor tenant before a New York float.
• Rising Mortgage Rates Will Squeeze Prices Into Year End — The two-year fix is 5.55%, against 4.25% before the war in Iran.

On the Diary

• Tuesday, 7.00am BST — UK labour market, October. Pay growth and the jobless rate, eight days before the Budget.
• Tuesday, 7.00am BST — PAYE earnings and employment, October. The payroll count, the fastest read on hiring.
• Wednesday, 7.00am BST — Consumer price inflation, September. The number the Bank carries into 5 November.
• Wednesday, 7.00am BST — Public sector finances, September. How much he borrowed in September, a week before he stands up.

The Toolbox

One tool from the site each issue, chosen to fit what has just happened. Free, no sign-up, and it shows its workings.

Capital Gains Tax Calculator

“Today’s lead turns on the gap between two rates. This works out what capital gains tax actually costs on a disposal under the rules as they stand, before anyone changes them.”

The Close

Two of today’s stories describe the same manoeuvre from opposite ends. A Chancellor short of revenue can raise a rate, which everybody notices, or he can start taxing a moment that used to pass untaxed — a firm handed over, a pot left behind. The second is quieter, it lands on people who have finished earning, and once the date has gone there is nothing left to plan.

If something here is wrong, or there is something you want dug into, just reply. It comes straight to me.

MJB