From capital gains speculation to pension inheritance changes, the industry is navigating a market in flux
With landlords weighing whether to sell, retirees rethinking pension strategies and advisers fielding questions that stretch well beyond their traditional remit, the convergence of capital gains tax speculation, stamp duty reform and sweeping inheritance tax changes is driving property decisions in ways the market has rarely seen.
Neal Groves (pictured top), head of personal tax at Kinbrook Group's Beavis Morgan, has been at the centre of those conversations. He urges caution, but says the window for considered action is narrowing.
"Speculation ahead of a Budget is, for an adviser, a very difficult time," Groves told Mortgage Introducer. "A lot of this can be changed before it's implemented. It's just about being aware and being as prepared as you can be."
Stay ahead of the UK mortgage market. Subscribe to the Mortgage Introducer daily newsletter for broker news, rate updates, and the industry latest delivered to your inbox every morning.
Capital gains tax: the sell-or-hold dilemma
Reports in The Times and other outlets ahead of the 28 October Budget suggest capital gains tax on property could rise – potentially to match income tax rates – prompting a wave of enquiries from landlords and second homeowners. Groves's position is measured.
"If you were going to sell the property anyway within the next year, then by all means accelerate it – that just makes sense," he said. "But if you had no intention of ever selling the property in the imminent future, to sell it because you think tax rates might go up – that would be a mistake. You're generating a tax liability you weren't going to have anyway."
The practical constraint is time. Completing an open market sale before a Budget announcement is unlikely, which means any acceleration strategy requires careful planning rather than a reactive decision.
Stamp duty: a tax the market is learning to navigate
Stamp duty land tax (SDLT) remains a persistent friction point across the market. While Groves stops short of endorsing wholesale reform, he acknowledges the structural case for change, and notes that even the wealthiest buyers take it seriously.
"There have been suggestions that it could become a tax on selling rather than a tax on buying, or find a way of spreading it between the buyer and the seller," he said. "At first-time buyer levels, it's a disincentive. You need your deposit, then you need your costs of buying the property. It’s very, very difficult."
Advisers working with first-time buyers will recognise the tension acutely. Understanding how stamp duty interacts with affordability and lending decisions has become a central part of the advisory conversation at every level of the market, and the relationship between tax policy and mortgage affordability is only likely to deepen as the Budget approaches.
What does the pension inheritance change mean for property owners?
Perhaps the most significant structural change on the horizon is the reform to pension inheritance rules, confirmed in the November 2025 Budget and due to take effect in April 2027. From that point, unused pension pots will fall within the scope of inheritance tax – the levy paid on an estate above a certain threshold when someone dies – fundamentally altering long-established estate planning strategies.
"Up until now, the golden rule had been, if you don't need to touch your pension, don't – because you can pass it on inheritance tax-free," Groves said. "Now people are starting to draw on their pension in their lifetime. There needs to be a switch in mindset. A pension pot is for your retirement savings. It's not an inheritance tax saving tool anymore."
The scale of the shift is considerable. Groves sets out the numbers: a couple with a £750,000 property and a £600,000 pension pot could, under current rules, keep the entire estate free of inheritance tax through spousal exemptions and nil-rate bands – the tax-free allowances each individual can pass on at death, totalling up to £1 million for a married couple leaving property to their children. Under the new rules, the pension pot is pulled into the taxable estate, taking the total to approximately £1.3 million and triggering a meaningful liability where previously there was none.
What advisers should be saying
The volume and complexity of tax-related enquiries landing with mortgage professionals is growing, yet the answers rarely sit within an adviser's own remit. Groves's advice is straightforward. Build the referral network now, before clients need it.
"I would suggest advisers say to their clients, ‘take advice, go and see a professional’," he said. "Having a network of trusted advisers around you that you can have a conversation with, it doesn't always have to be a chargeable conversation, but you can get some advice."
He sees a commercial opportunity in that dynamic, particularly for smaller firms. "You need your mortgage adviser, your accountant, your wealth adviser. If you've got that team around you – perhaps for a small mortgage broker – that's an opportunity to buddy up with local accountants who might then refer work to you."
Want to be regularly updated with mortgage news and features? Get exclusive interviews, breaking news, and industry events in your inbox – subscribe to our FREE daily newsletter. You can also follow us on Facebook, X (formerly Twitter), and LinkedIn.
