The Impact of the Autumn Budget 2025 On Your Inheritance

The Chancellor delivered the Autumn Budget on Wednesday 26th November 2025, and several of the announcements will affect how families plan for inheritance tax. This is especially true for anyone who owns a business, farmland or higher value property. Here is a simple overview of the key changes.

Inheritance Tax Thresholds Frozen Until April 2031

The two main IHT allowances, the Nil Rate Band of £325,000 and the Residence Nil Rate Band of £175,000, will stay at their current levels until April 2031. These amounts have not increased for many years, even as house prices and the cost of living have risen substantially. As a result, more families will find that their estates could be subject to IHT in the future. This makes it more important than ever to review your Will and ensure your plans are up to date.

Changes to Reliefs for Business and Agricultural Property

There were important updates for people who own farms or businesses. From April 2026, Agricultural Property Relief and Business Property Relief will only provide 100 percent protection from IHT on the first 1 million pounds of qualifying assets. Anything above this will receive only 50 percent relief.

The good news is that this 1 million pound allowance will now be transferable between spouses and civil partners. This means that if one partner does not use the full amount on their death, the unused part can pass to the survivor. Couples can therefore benefit from up to 2 million pounds of protected assets in total. This will be a welcome change for many families, especially those who might have otherwise needed to restructure their assets.

Why This Matters for Families

These updates may increase the number of estates that fall within the IHT system and may create tax bills for some farms and family businesses for the first time. For many people, this will come as a surprise. Planning ahead will help make sure that your loved ones receive as much of your estate as possible and do not face unexpected costs.

Time to Review Your Plans

With the Budget confirming freezes and introducing new limits, now is the right time to review your Will, consider how your assets are owned and make sure your plans reflect the latest rules. A small amount of planning today can make a significant difference to the future financial security of your family.

If you have any questions on how the autumn budget will affect your inheritance planning going forward, reach out to our friendly team for personal support and guidance.