Four in five high-net-worth families brace for tax rises, Saltus report finds

Approximately four in five high-net-worth families say they expect tax rises in the coming year, according to Saltus, a leading wealth manager. The biannual Saltus Wealth Index Report notes that autumn Budget proposals are fueling fears of punitive policies aimed at wealth, and that one in three wealthy individuals has already taken steps to shield their nest eggs from potential tax hikes.

Saltus tracks the sentiment of more than 2,000 adults with investable assets of at least £250,000. The index showed a modest improvement in confidence: the Saltus barometer rose to 64.7 in August from 58.2 in February, following the Labour Party’s initial Budget. Yet confidence in the economy remains fragile, reflecting persistent inflation, budget fears and a cautious outlook for growth. Dr. Michael Peacey, a senior lecturer at the University of Bristol and a compiler of the index, noted that the rebound comes with caveats: investors feel somewhat more prosperous but not necessarily more secure.

The report highlights that the fear of tax changes is now the second-biggest risk to wealth, second only to inflation (which stands at 3.8%). The government’s policy path under Labour is a focal point for wealthy households planning ahead. Roughly two-fifths of respondents expect higher income taxes, even as the Labour Party has pledged not to raise income tax in its manifesto—an expectation that the party’s governance could challenge.

Tax changes loom large in the wealth calculus. Some 78% of those surveyed expect a wave of tax hikes to be introduced over the next 12 months. In addition, 48% say tax changes are the biggest single risk to their wealth, with inflation a close second at 58%. The emphasis on capital gains tax (CGT) is pronounced: 46% of respondents think CGT will rise in the coming year, while 34% expect no change or a rate freeze.

The Saltus findings underscore how policy design could reshape investment and estate planning. CGT changes have already been a live issue in recent budgets: the existing CGT structure raised basic-rate taxpayers to 18% from 10% and higher-rate taxpayers to 24% from 20%, and the annual CGT allowance was slashed from £12,300 to £3,000. Wealth holders are therefore scrutinizing how any future changes to CGT, alongside potential adjustments to income tax, might affect the after-tax value of assets such as stocks and shares, buy-to-let properties, and valuable possessions.

Two in five wealthy families believe the Exchequer will break its pledge not to raise income tax, suggesting that higher personal taxation remains a real possibility in the next Budget. Inheritance tax (IHT) is also on the radar. The current regime allows a couple to pass on up to £1 million tax-free under combined thresholds (the basic IHT threshold plus the residence nil-rate band), and many respondents expect further reform. More than one-third anticipate a 40% IHT rate or a frozen nil-rate band, which would limit the amount that can pass tax-free to heirs.

“Whether it’s CGT, income tax, or IHT, these high-net-worth individuals are braced for further changes at the autumn Budget given the Chancellor’s limited fiscal room for manoeuvre,” said Mike Stimpson, a partner at Saltus. “This cohort are the wealth creators, investors and employers who drive economic growth — if their confidence is undermined by continual uncertainty, that has consequences for everyone.”

The Saltus report also shows families turning to advisers to deploy wealth-protection strategies such as trusts, gifting and estate planning in a bid to shield legacies from future tax shocks. The broader mood among the wealthiest segments is nuanced: confidence in the economy has improved from 48% in February to 66% in August, but remains well below the pre-budget peak and far from an unequivocal recovery. The report notes that the August rebound occurred amid a broader market recovery after a previous period of uncertainty, with GDP and real wages showing modest gains, rates easing, and a UK-US trade deal contributing to a cautious optimism.

Nevertheless, the data suggest a persistent access-to-capital dilemma for the wealthiest households. Almost a fifth of wealthy families remain unconfident about the economy, and 5% feel extremely unconfident. The October-November Budget cycle is particularly salient for this group, with fears that new measures could impede their ability to preserve wealth, fund business activity, and plan for future generations.

Voting patterns among the wealthiest voters also feature in the Saltus findings. While 49% of the nation’s wealthiest people voted Labour at the last election, almost half now express regret about that decision, citing underperformance in the economy and underinvestment in the NHS as key reasons. Inheritance tax changes and private-school fees are among the reforms that have driven some wealthy households to rethink long-term commitments to the UK.

IHT reforms and related policies are also having a global effect: about a quarter of high-net-worth individuals have considered leaving the UK in light of tax changes, while some cite Brexit and regulatory shifts as contributing factors. The combination of tax policy and the cost of private education—already affected by value-added tax on fees—has driven moves abroad for some families. Nine in ten respondents with children send them to private school, and 71% say they have already made or would be willing to make sacrifices to cover fee increases.

The Saltus index consistently emphasizes how policy uncertainty shapes the financial decisions of the wealthiest households. While the latest readings show a modest uplift in confidence, the broader message remains: tax policy, inflation and macroeconomic risk are entwined with household planning and business investment. As the autumn Budget looms, wealth managers and their clients will be watching closely for signals on CGT, income tax, IHT and any adjustments to the residence nil-rate band that could redefine the transfer of wealth across generations.