Inheritance Tax - Autumn Budget

Inheritance tax is firmly in the spotlight ahead of next week’s Autumn Budget, with speculation mounting that Chancellor Rachel Reeves could announce reforms to one of Britain’s most controversial levies. Here at Giles Wilson, we are considering what possible changes the Chancellor will make, and how these could impact our clients. Follow along with our three-part series, leading up to Budget Day on Wednesday 26^th November.

Possible Changes on the Horizon

• Thresholds under review: The current nil-rate band of £325,000 has been frozen for years. Rising property prices mean more families are being drawn into paying inheritance tax (IHT), despite only around 4% of estates paying it today (according to HMRC figures). However, we at Giles Wilson have noticed a higher percentage than this of our clients end up paying inheritance tax when they do not engage in estate planning, because of the high property prices in this area.

• Lifetime gifting rules: Analysts expect potential restrictions on gifting strategies, which have long been used to reduce IHT exposure. One such change would be increasing the 7-year rule to 10 years. This would impact setting up trusts during your lifetime as well as making gifts.

• Pensions and property: Last year’s reforms included bringing certain pension savings into scope from April 2027. This Budget may extend changes to inherited property or business assets, although given the complexity of the pension changes already announced and the time spent putting in place mechanisms for these to work, it is unlikely that these will be tightened up any further this year.

On Monday and Tuesday next week we are going to be examining what the impact of these potential changes would have in more detail, so keep an eye out for our next two insight pieces.