Inheritance tax (IHT), which is currently 40%, is usually paid on the value of a deceased person’s assets above a threshold of £325,000 (Nil Rate Band allowance). If the person is single and does not have children (direct descendant) to leave their property to. The Nil Rate Band allowance has not increased for many years and this has been capped until 2030. With house prices increasing, this means that many single people with an estate more than £325,000 will have to pay inheritance tax. This penalises single people who do not have children.

For married couples who have children (direct descendants) who they intend to leave their estate to, have a transferable allowance of £650,000 and Residence Nil Rate Band up to £175,000 each (based on half share of value of the property), allowing up to £1 million before tax.

At present, often money saved in a pension does not count towards your estate for inheritance tax purposes, from April 2027, inherited pensions will be included in inheritance tax. This will impact a lot of clients and will increase the number of people having to pay inheritance tax.

Business Property and Agricultural Property Relief has been capped at £1 million, which will see a lot of business owners and farmers having to pay increased tax.

We recommend to all our clients to review their estate and tax affairs every few years as standard. Given the budget it maybe a good time to review your Will and Estate planning needs.