Autumn Budget 2024: what the inheritance tax changes mean for estate planning

The Chancellor's Budget on 30 October 2024 contained the most significant inheritance tax announcements in years. None of it takes effect immediately - which is precisely why the planning window matters.

Business and agricultural reliefs capped from April 2026

As announced at the Budget, from April 2026 the 100% rate of Business Relief and Agricultural Relief is to be capped at the first £1 million of qualifying assets, with relief at 50% above that - in effect a 20% tax rate on the excess. For business owners and farming families whose Wills were drafted on the assumption of unlimited 100% relief, those Wills now need review before the rules change. (Editor's note: the cap was subsequently amended before commencement - see our April 2026 analysis of the rules as they came into force.)

Pensions enter the IHT net from April 2027

From April 2027, most unused pension funds will be included in the estate for inheritance tax. For many families, pensions are the largest asset outside the home - and the long-standing strategy of spending other assets first and leaving the pension untouched now needs rethinking.

Thresholds stay frozen

The nil-rate band remains frozen at £325,000, extending a freeze in place since 2009 - meaning more estates are drawn into IHT each year as asset values rise.

What to do

Neither change requires panic; both reward early review. If your estate includes business or agricultural assets, or significant pension funds, the question is simple: was your Will drafted for rules that are about to change?

Key takeaways

• BR and APR at 100% capped from April 2026 as announced; 50% relief above the cap
• Unused pensions join the IHT estate from April 2027
• Wills drafted under the old assumptions need review before the changes land

(We do not give regulated tax advice: our role is designing the legal structures with the tax consequences in mind.) Book a complimentary Will review with a STEP-qualified estate planner.