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The UK Budget 2024 may not have delivered a complete overhaul of Inheritance Tax (IHT), but it did introduce — and confirm — key changes that will shape estate planning for years to come. From the nil-rate band freeze to new restrictions on long-standing reliefs, the message is clear: planning is more critical than ever.

This article explains what’s changing, what’s under review and how families can plan.

Nil-rate band freeze extended to 2030

One of the biggest (if not the most glamorous) announcements was the decision to freeze the Inheritance Tax nil-rate band. The threshold — £325,000 for individuals and up to £1 million for married couples or civil partners (including the residence nil-rate band) — had been frozen until 2028. It’s now frozen until April 2030.

With inflation and rising property values, this freeze means IHT will catch more estates despite no increase in real terms. A silent tax rise catching more and more families every year.

Unused pensions to fall within Inheritance Tax

One of the most significant changes is the IHT treatment of unused pensions. Under current rules, most pension funds not accessed before death can, in many cases, pass free of IHT. This has made pensions a powerful estate planning tool—often prioritised over ISAs or other savings subject to IHT.

However, the Chancellor announced that unused pensions would be brought into the IHT net from April 2027. This will mean that this previously untaxed asset will be subject to 40% IHT when implemented.

This is particularly relevant for individuals nearing or beyond retirement age who have deliberately deferred drawing from their pensions. Reviewing pension strategies and the timing of withdrawals are now essential.

Agricultural and Business Property Relief confirmed

Another significant announcement was the Agricultural Property Relief (APR) and Business Property Relief (BPR) reform. From 6 April 2026, relief under APR and BPR will be capped at £1 million. Any value above this threshold will be taxed at 50% of the standard IHT rate — 20%, not 40%.

This is a significant change from the current rules, which allow 100% IHT relief on qualifying business and agricultural assets regardless of value. It will particularly affect farming families, entrepreneurs, and owners of high-value trading businesses.

Now is the time to review succession plans, restructure business ownership or consider earlier transfers.

Planning strategies still available — for now

Despite these upcoming and proposed changes, several IHT planning tools are still available:

Using the annual £3,000 gift allowance, plus small gift exemptions
Making Potentially Exempt Transfers (PETs), which become exempt after seven years
Leaving 10% or more of the estate to charity, which reduces the IHT rate to 36%
Ensuring Wills are up to date and make full use of transferable allowances

These should be tailored to each family’s circumstances. If the changes announced in the UK Budget affect you, it’s imperative to act.

Why tailored advice matters

Inheritance Tax planning is about more than numbers — it’s about making sure your estate passes according to your wishes with as little unnecessary cost or complexity as possible. General guidance isn’t enough with so many rules under review or changing.

At Carr Berman Crichton, we help individuals, couples, families, and business owners navigate this complex area with clarity and confidence. Whether you’re reviewing a Will, exploring lifetime gifting, or planning succession for a farm or family business, we’ll ensure your estate plan is robust, tax efficient, and future-proof.