As announced in the Autumn Budget 2024, the Inheritance Tax nil-rate bands are already set at current levels until 5 April 2028, and the government will introduce legislation in Finance Bill 2024-25 to fix these levels for a further two years until 5 April 2030.
The details are as follows:
- nil-rate band: will continue at £325,000.
- residence nil-rate band: will continue at £175,000.
- residence nil-rate band taper: will continue to start at £2m.
Qualifying estates can pass on up to £500,000 without incurring an inheritance tax liability, and the qualifying estate of a surviving spouse or civil partner can pass on up to £1m tax-free.
The government will reform Agricultural Property Relief and Business Property Relief effective from 6 April 2026. The existing 100% relief rates will remain applicable for the first £1m of combined agricultural and business property.
After this threshold, the relief rate will decrease to 50%. This 50% rate will also apply to shares designated as ‘not listed’ on recognised stock exchanges, such as AIM.
The government plans to publish a technical consultation by early 2025, and a summary of these changes has been released alongside the Autumn Budget 2024.
As announced at Autumn Budget 2024, the government will bring unused pension funds and death benefits payable from a pension into a person’s estate for Inheritance Tax purposes from 6 April 2027.
As part of these changes, pension scheme administrators will become liable for reporting and paying any inheritance tax due on unused pension funds and death benefits.
