UK Budget Sparks Uncertainty Over Tax Policy Changes

The British government is preparing for its budget announcement on October 28. Chancellor John Healey faces the challenge of balancing public accounts while honoring promises not to raise income tax, national insurance, or VAT.

Market attention is shifting toward potential changes in other, less central taxes. Inheritance tax, known as IHT, has become a subject of intense debate due to rising receipts. The total collected reached 8.5 billion pounds in the 2025-26 fiscal year.

The official budget watchdog forecasts that IHT revenue will rise to 9.5 billion pounds this year. Projections suggest this figure could reach 14.5 billion pounds by 2031. Rising property values and frozen exemption thresholds are driving this upward trend.

Currently, the standard inheritance tax rate is 40% on assets exceeding 325,000 pounds. Relief mechanisms allow for the transfer of wealth between spouses or to direct descendants. These provisions reduce the effective rate paid by many families to an average of 13%.

Changes in fiscal policy within major economies can alter investor risk perception and impact the stability of the dollar against other global currencies. Uncertainty regarding tax revenue and state debt directly influences capital behavior in risk assets like Bitcoin.