Budget Day Update
So, the day is here, and we have been eagerly awaiting news of how the Labour Government will treat the Inheritance Tax (IHT) allowances.
The basic tax allowances are staying put. Everyone is entitled to a Nil Rate Band (NRB) of £325,000 and this remains the same. It was previously frozen at this rate until 2028, but this has now been extended until 2030.
For now, the second allowance of the Residential Nil Rate Band (RNRB) has not been touched and this can still be claimed if you are handing down your home to your direct descendants up to £175,000 per person.
For most people, this doesn’t look too bad.
Something that will impact people more however is the fact inherited pensions that have been classed as assets outside of the estate (and therefore not attracting IHT) will be brought into the IHT regime from 2027. This could bring more people into the scope of paying IHT and impact the way you may want to save for retirement.
The Chancellor has also announced reform to Agricultural Property Relief (APR) and Business Property Relief (BPR) with changes to the rate of the relief that can be claimed over £1m of assets.
For help with planning your estate and making a will contact Laura.Harrington-Rutterford@attwells.com.
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