Heads up, business owners and landowners. The government
is getting ready for the Autumn Budget, and with a huge fiscal gap of £51 billion to fill, all eyes are on potential tax changes.
But while we wait, some major tax reforms that are definitely coming into play need your immediate attention, especially when it comes to Inheritance Tax (IHT).
You may have heard about the draft legislation for the Finance Bill 2025-26, published back in July. Well, the technical consultation on these plans just closed on September 15, so the clock is ticking. The most significant changes are to Business Property Relief (BPR) and Agricultural Property Relief (APR). Here’s the most important detail you need to know: from April 6, 2026, there will be a new, combined £1 million relief allowance for assets that qualify for BPR and APR. Anything above that amount will only get 50% relief, which means you’ll be facing a 20% IHT charge on the excess.
But wait, there’s a critical catch. This new £1 million allowance is not transferable to your spouse or civil partner. This is a huge change from the current rules and a potential pitfall for your succession planning. If you leave all your qualifying assets to your spouse to defer tax, you could be losing out on that valuable £1 million allowance. To make sure you get the full benefit of both allowances in your family, you need to start planning now to pass at least £1 million of these assets directly to your children or into a trust. This is a big deal and means you should be reviewing your will and succession plan immediately, well before the April 2026 deadline. The government has confirmed the option to pay IHT in up to 10 interest-free instalments will also be extended to all property eligible for APR/BPR, which offers a small silver lining.
On top of this, other IHT reforms are on the way. From April 6, 2027, the responsibility for reporting and paying IHT on unused pension funds and death benefits will shift from pension administrators to personal representatives. On a positive note, however, the government has confirmed that all death-in-service benefits from registered pension schemes will be excluded from IHT from that same date.
In other tax news, there was a small bit of good news this month. Following the Bank of England’s base rate cut on August 7, HMRC has lowered its interest rates for late payments and repayments. While this is a small reprieve, the big news will come with the Autumn Budget, where we could see changes to ISAs, Capital Gains Tax, and the continued freeze on income tax thresholds.
Don’t wait until it’s too late to secure your legacy. Our experts can help you review your succession plan and adapt to the new IHT rules before the April 2026 deadline. Contact us for a consultation.
https://www.gov.uk/government/publications/hm-revenue-and-customs-trusts-and-estates-newsletters/hmrc-trusts-and-estates-newsletter-august-2025
is getting ready for the Autumn Budget, and with a huge fiscal gap of £51 billion to fill, all eyes are on potential tax changes.
But while we wait, some major tax reforms that are definitely coming into play need your immediate attention, especially when it comes to Inheritance Tax (IHT).
You may have heard about the draft legislation for the Finance Bill 2025-26, published back in July. Well, the technical consultation on these plans just closed on September 15, so the clock is ticking. The most significant changes are to Business Property Relief (BPR) and Agricultural Property Relief (APR). Here’s the most important detail you need to know: from April 6, 2026, there will be a new, combined £1 million relief allowance for assets that qualify for BPR and APR. Anything above that amount will only get 50% relief, which means you’ll be facing a 20% IHT charge on the excess.
But wait, there’s a critical catch. This new £1 million allowance is not transferable to your spouse or civil partner. This is a huge change from the current rules and a potential pitfall for your succession planning. If you leave all your qualifying assets to your spouse to defer tax, you could be losing out on that valuable £1 million allowance. To make sure you get the full benefit of both allowances in your family, you need to start planning now to pass at least £1 million of these assets directly to your children or into a trust. This is a big deal and means you should be reviewing your will and succession plan immediately, well before the April 2026 deadline. The government has confirmed the option to pay IHT in up to 10 interest-free instalments will also be extended to all property eligible for APR/BPR, which offers a small silver lining.
On top of this, other IHT reforms are on the way. From April 6, 2027, the responsibility for reporting and paying IHT on unused pension funds and death benefits will shift from pension administrators to personal representatives. On a positive note, however, the government has confirmed that all death-in-service benefits from registered pension schemes will be excluded from IHT from that same date.
In other tax news, there was a small bit of good news this month. Following the Bank of England’s base rate cut on August 7, HMRC has lowered its interest rates for late payments and repayments. While this is a small reprieve, the big news will come with the Autumn Budget, where we could see changes to ISAs, Capital Gains Tax, and the continued freeze on income tax thresholds.
Don’t wait until it’s too late to secure your legacy. Our experts can help you review your succession plan and adapt to the new IHT rules before the April 2026 deadline. Contact us for a consultation.
https://www.gov.uk/government/publications/hm-revenue-and-customs-trusts-and-estates-newsletters/hmrc-trusts-and-estates-newsletter-august-2025