Guide to navigating the new UK Inheritance Tax rules

Welcome to our guide to navigating the new UK Inheritance Tax rules. 

The October 2024 Budget proposed significant changes to UK Inheritance Tax (IHT) rules, particularly
for trading businesses and farmland owners. Effective from April 2026, these types of assets will have
reliefs capped at 100% for the first £1 million of qualifying assets. For valuations exceeding £1 million, the
relief will reduce the IHT payable by 50%.

Although this rate is lower than the standard 40%, many families who were previously unaffected by IHT may now find themselves impacted, presenting new challenges for estate planning.

Understanding these proposed changes is crucial for anyone who owns a family business,farmland, or other qualifying assets. Effective planning could help minimise tax liabilities, safeguard your estate, and ensure your financial legacy for the next generation.

Understanding the changes

Starting in April 2026, farmland and trading businesses valued over £1 million will enter the IHT framework for the first time.

While the reduced 20% rate applies only to these qualifying assets, the associated financial responsibility could pose challenges for families, particularly when liquidating assets to cover tax bills is not feasible.

Early planning is essential to mitigate exposure and ensure your wealth is preserved.

For more detailed information, refer to our guide or contact our financial planners for personalised advice tailored to your needs. We're here to provide tailored advice and help you arrange your estate in a tax efficient manner.

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