The Autumn Budget is expected to confirm a number of tax measures, including potential updates to Inheritance Tax (IHT).
On 26 November, Chancellor Rachel Reeves will set out the Government’s fiscal plan, with many anticipating additional changes to IHT.
For individuals and families, this makes it more important than ever to ensure estates are structured carefully and reflect personal wishes.
Inheritance Tax so far
IHT has been one of the Chancellor’s preferred tools in closing the nation’s financial gap and boosting revenue, particularly given Labour’s pledge not to raise direct taxes on workers.
Last year’s Autumn Budget froze the nil-rate band at £325,000 until 2030 and introduced revisions to Agricultural Property Relief.
From 2027, unused pensions and death benefits will also fall within an individual’s estate.
These reforms have already contributed to record receipts, with HMRC collecting £6.7 billion in IHT during 2022/23.
What else might change?
There is speculation that the Government may go further, with lifetime gifting allowances under review.
At present, individuals can make gifts of up to £3,000 each year without IHT and gifts made more than seven years before death are also exempt. Taper relief applies between three and seven years.
A potential reform would be a lifetime cap on gifts, restricting how much can be passed on tax-free. Such a move would impact the value of estates and limit the ability to transfer wealth.
Preparing now
While the exact measures will only be known once announced, the confirmed changes already in place underline the need for proactive planning. Reviewing your estate and seeking expert advice can help reduce exposure to tax and give peace of mind.
With the Autumn Budget fast approaching, now is the right time to act. Speak to one of our advisers to prepare for the road ahead.
