Budget October 2024 - Inheritance Tax

Significant changes were announced to the treatment of Agricultural Property Relief and Business Property Relief, restricting 100% relief to the first £1 million of agricultural or business property. It was also announced that as of 6 April 2027, unspent pension funds will be subject to Inheritance Tax as they will become part of an estate upon death.

Tax planning - There are various gifts that are exempt from Inheritance Tax. These include an annual gift exemption of £3,000, a small gift allowance of £250 per person, specified gifts on wedding and regular payments out of income. The ‘7 year rule’ also allows for gifts that have been given more than seven years before death to fall outside the charge to Inheritance Tax. Gifts given 3-7 years before death are subject to a taper relief, so are taxed on a sliding scale depending on the number of years between the gift and death.