Budget 2025 Inheritance Tax Changes
The 2025 Autumn Budget made significant changes to inheritance tax. Nil-rate band thresholds are frozen at £325,000 until 2031, bringing more estates into the IHT net as property values rise.
From April 2026, Business Property Relief and Agricultural Property Relief are capped at £1 million per person for qualifying assets. Assets above that cap attract 50% relief rather than 100%, giving an effective IHT rate of 20% on the excess. From April 2027, unused pension funds will be included in taxable estates for most people.