Autumn Budget 2025
Agricultural and business property 100% relief allowance
Any unused amount of the £1 million 100% allowance on Agricultural Property Relief (APR) and Business Property Relief (BPR), as announced at the previous Budget in October 2024, will be transferrable between spouses and civil partners when the changes come into effect on 6 April 2026.
This brings the allowance in line with the nil rate band and residential nil rate band, which were already transferrable.
The measures are to include where one spouse dies prior to 6 April 2026 and the full £1 million of BPR/APR has not been used i.e. where all assets transferred to a surviving spouse.
Thresholds frozen for an additional year
Inheritance tax thresholds have been frozen at their current levels until 2030/31. This includes the following:
Extension of anti-avoidance provisions
There is currently anti-avoidance legislation that looks through offshore structures for inheritance tax purposes, specifically in relation to UK residential property.
This prevents non-long term resident individuals (broadly those who have been UK resident for less than 10 of the previous 20 years) or their trusts, holding property indirectly by using non-resident companies.
The government have announced that this anti-avoidance will be extended to include UK agricultural land and property from 6 April 2026. This is to coincide with the changes to APR and BPR reliefs as noted above, to prevent individuals restructuring their agricultural property interests via non-UK companies.
Other restrictions will be introduced so that when a settlor of a trust ceases to be long-term UK resident, there will be an IHT exit charge triggered if there is a later change in the situs of their trust assets from UK to non-UK. This stops trustees manipulating situs rules to avoid an exit charge.
Charitable donations
Inheritance tax reliefs for gifts to charitable trusts will be corrected to ensure the trusts meet the wider definition of a charity with the ensuing jurisdiction and regulatory requirements. This will take effect from 26 November 2025 for lifetime gifts to charities and from 6 April 2026 for gifts on a death.
