Overview and key points
As well as the changes to employer National Insurance Contributions, the Autumn Budget 2024 also set out proposals that could bring about significant changes to Inheritance Tax implications for many individuals.
Sophie Haslehurst, Chartered Financial Planner with Integrity365, takes us through the key points:
Key takeaways
Pensions & estate planning
Agricultural & Business Property Relief
The impact of the frozen Nil Rate Band
Inheritance Tax (IHT) planning is more important than ever as the Autumn Budget 2024 introduced significant proposals that could potentially push many estates into taxable territory.
Changes to pensions & estate planning
Currently, pensions are an incredibly tax-efficient tool for passing on wealth as they are not subject to IHT on death in the 2025/26 tax year. However, as of 6th April 2027, pensions are set to become part of an individual’s estate for the relevant IHT calculations and therefore, tax to be applied.
This change makes it even more important to review your pension arrangements and assess the implications it may have on your tax position ahead of time to plan accordingly for these new rules.
IHT is currently charged at 40% on assets above an individual’s tax-free allowances. However, with key reliefs and exemptions that have historically been used to mitigate IHT now under threat, more estates may be exposed to IHT if action is not taken.
Agricultural Property Relief (APR) & Business Property Relief (BPR)
APR and BPR have historically provided up to 100% relief from IHT on the agricultural value of land, properties, and qualifying business assets.
However, from 6th April 2026, these reliefs are expected to be capped at a combined value of £1 million. Any value exceeding this threshold may be subject to a 20% IHT charge (i.e. a 50% discount to Inheritance Tax).
This could significantly impact farming families and business owners who rely on these reliefs to pass on their assets tax-efficiently.
The frozen Nil Rate Band (NRB) adding pressure
The NRB (the threshold above which IHT is charged) has remained frozen at £325,000 since 2009. To put this into context, many estates already exceed this threshold due to rising house values.
For example, the average house price in the UK as of January 2025 was £268,548, whereas back in 2009 when the current NRB was set, the average UK house value was worth around £155,000. (Land Registry UK House Price Index, 2025).
This, combined with the new pension rules and changes to APR and BPR coming into play, means that even more families could find themselves facing added IHT liabilities and complexities that comes with probate and payments involved.
Time to plan
Whilst these changes have been proposed, the rules have not yet come into force and things can always change. However, it is important to start planning conversations early with an Independent Financial Adviser. That way we can assess how these changes could impact your IHT position and look at potential solutions so that you are prepared when the time comes to adapt your plans as required.
Speak to our trusted team of Independent Financial Advisers today on 0117 450 1300 or email
enquiries@integrity365.co.uk