ARTICLE · 29 NOVEMBER 2024

Autumn Budget 2024 – Inheritance Tax Changes

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The UK Budget announced key Inheritance Tax (IHT) changes effective from 2026, including caps on business/agricultural reliefs, taxation of undrawn pensions, and a freeze on nil-rate bands until 2030. Consultations are forthcoming to finalize details.

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Paul Beare (Paul Beare Ltd)

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A number of changes to Inheritance Tax (IHT) were announced as part of the Budget measures. We have covered each of the main measures below. It should be noted that these changes are not coming into effect until April 2026 at the earliest.

IHT reliefs

Changes were announced to IHT Business Relief and IHT Agricultural Property Relief. Currently, these reliefs can offer a significant tax benefit for estates with qualifying business and agricultural assets. Under these reliefs, a benefit of either 50% or 100% relief is available from IHT with no cap.

The Chancellor announced that from April 2026, qualifying estates with agricultural or business assets will only be able to claim 100% tax relief on the first £1 million of assets. Any value over £1 million will see tax relief restricted to 50%. A consultation is expected to be published next year with further details of the intended changes.

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