Inheritance Tax Thresholds
The Inheritance Tax nil-rate band of £325,000 and residence nil-rate band of £175,000 had already been frozen at their current levels until April 2030. It was announced today they will stay fixed at these levels for a further year until April 2031. This means the nil-rate band has been frozen at £325,000 since April 2009 – 22 years!
From 6 April 2026, a new £1 million 100% relief allowance will apply to the combined value of assets eligible for Agricultural Property Relief (APR) and Business Relief (BR). This was announced in the Autumn Budget 2024, but the allowance could not be transferred to a spouse or civil partner and used on second death. Today’s Budget came with the welcome news that the unused allowance can be transferred to a spouse or civil partner. This is a softening of the previously announced changes and is aligned with the wider Inheritance Tax rules which allow for transfers between spouses and civil partners.
