Budget changes include a cap on Agricultural and Business Relief, and new Inheritance Tax rules for pensions.
The Chancellor announced changes in the Government's Budget on 30 October 2024 to Agricultural Relief and Business Relief and to bring the majority of unused pension funds and death benefits into the scope of Inheritance Tax.
The reforms to Agricultural Relief and Business Relief come into force fully from 6 April 2026, and anti-forestalling provisions have already come into force, effective from 30 October 2024, which may apply to lifetime gifts made now. The headline changes announced are the introduction of a new combined cap of £1 million on the value of agricultural and business property in respect of which relief from inheritance tax can be claimed at 100%. The rate of relief for the value of any qualifying agricultural and business property in excess of £1 million will be restricted to 50%.
The reforms to pension funds and death benefits come into force from 6 April 2027.
Further details are awaited in the draft legislation and a technical consultation, expected in early 2025.
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