Breaking news on IHT reform
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Christmas has come early for farmers and business owners. Today (23 December 2025), the government has announced that the new 100% relief allowance will be £2.5m per person from 6 April 2026, rather than £1m as announced at Budget 2024.
This will be welcome news for many in the farming and business community. It means that married couples and civil partners have a combined allowance of £5m and, with their nil-rate bands intact, can pass on up to £5.65m of qualifying property tax-free, with 50% relief from inheritance tax thereafter. Effectively, any excess value of agricultural or business property will be taxed at a rate of 20% rather than 40%, and the tax can be paid in interest-free instalments over 10 years.
At this stage, it remains unclear whether the 100% relief allowance for trusts will also be raised to £2.5m. The announcements only refer to individuals and their estates. We may not know until the changes are fed through to the draft Finance Bill from 5 January next year.
Anyone affected by the changes will nevertheless want to review their circumstances, and look at their wills and planning options early in the New Year. Please speak to our expert team for further advice.
