Inheritance Tax (IHT) Changes for Pensions:
One of the most significant announcements from the Autumn Budget is the future inclusion of pensions in inheritance tax (IHT) calculations. From April 2027, pensions will be treated as part of an estate for IHT purposes. This move could substantially increase tax liabilities, especially impacting unmarried couples.
What this means for planning: Previously, pensions were largely IHT-exempt, making them an efficient wealth-transfer tool. Now, careful planning is crucial. Savers might consider drawing tax-free cash earlier or gifting portions of their pension wealth to reduce future tax burdens. Consulting a financial planner will be key in mitigating these impacts effectively.
Changes Impacting Farmers:
For farmers, the reform of Agricultural Property Relief (APR) and Business Property Relief (BPR) will be crucial. Starting April 2026, reliefs will cover 100% of the first £1 million in agricultural or business property, with a 50% relief rate thereafter
Implications for rural businesses:
These changes provide some stability but raise concerns about increased taxation on family farms. The government has also extended APR to land managed under environmental agreements, promoting sustainable farming initiatives
However, tighter restrictions could challenge long-term investment confidence.