Deborah Cable

Senior Associate

The 2024 Budget brought a shake up to private client law and tax planning in particular.

 

The Inheritance Tax (IHT) free threshold known, as the nil rate band, will continue to be frozen at £325,000 and the residence nil rate band will continue at £175,000. There is no change to the residence nil rate band taper which will continue to start at £2 million until 5 April 2030. The spouse exemption and the gifting rules remain unchanged. The standard IHT rate remains at 40%.

 

From 6 April 2026, 100% IHT relief through Business of Agricultural Property Relief will be capped at £1 million of assets (combined agricultural and business property). Assets over that amount will be charged at 20%.

 

From 6 April 2027, unused pension funds and death benefits payable from a person’s estate will be subject to IHT. It is the pension scheme administrators that will be liable for reporting and paying IHT due on the assets. This is a significant change to the current position where pensions can be left free of IHT and is likely to result in people using their pension pots rather than leaving them untouched.

 

Finally, from 30 October 2024 the lower rate of CGT increased from 10% to 18% and the higher rate from 20% to 24%.

 

Tax planning is more important than ever before. Please contact our Private Client team to discuss how this may affect you.