Estate planning now and moving forward
How the Budget could impact what you recommend
Key inheritance tax Budget changes
Frozen allowances
Nil rate band (NRB) and residence nil rate band (RNRB) to April 2030.
Pensions included for inheritance tax from April 2027 (further consultation announced).
Late payment interest increasing to: Bank of England Base rate +4% from April 2025.
Reform to non-domiciled rules from April 2025.
Individuals’ tax resident in the last 10 out of 20 years will have worldwide assets subject to inheritance tax. Non-UK trusts also impacted.
Agricultural Property Relief (APR) and Business Relief (BR)-qualifying companies (unquoted) from April 2026.
£1m combined APR and BR allowance at 100% inheritance tax (IHT) relief.
Above £1m at 50% IHT relief. An effective IHT rate of 20%.
Business Relief-qualifying companies (AIM) from April 2026.
50% IHT relief. An effective IHT rate of 20%.
New client planning opportunities
Planning for inheritance tax on pensions
Married couples with more than £1 million in Business Relief-qualifying investments
Planning for clients with a Business Relief-qualifying AIM portfolio
Planning for clients with more than £1 million of Business Relief assets
Risks to bear in mind
Capital at risk
The value of an investment, and any income from it, can fall as well as rise. Investors may not get back the full amount they invest.
Tax relief can’t be guaranteed
Tax relief depends on the companies invested in maintaining their BR-qualifying status. Tax treatment depends on individual circumstances and tax rules could change in the future.
Volatility and liquidity
The shares of AIM-listed and unlisted companies could fall or rise in value more than shares listed on the main market of the London Stock Exchange. They may also be harder to sell.
Assessed case-by-case
HMRC will only conduct a BR assessment after the death of an investor, to confirm whether the companies invested in qualify for BR at that time.
Catch up on our recent webinar
Listen to a recording of our webinar where we recap the recent changes to BR and IHT, common misconceptions about BR, and go into detail about some new client planning opportunities following the Budget.
This on demand webinar was recorded on 20 November 2024. All information will have been correct at the time, but some statistics and deadlines may now be out of date. You can still submit questions, but these won’t be answered in the Q&A. Instead a member of our team will get in touch with an answer.
Ask Octopus – our new IHT and estate planning helpdesk
Do you have a technical question about estate planning, or a question about the tax rules relating to a client’s estate, or the legalities of estate planning? We’re here to offer advisers support.
Key resources
A guide to untangling inheritance tax
A guide to Business Relief
Inheritance tax and Business Relief education hub
Our products
Octopus Inheritance Tax Service
Our flagship service targets a steady, predictable return and has been helping investors pass on more of their wealth for over a decade.
Octopus AIM Inheritance Tax Service
This service helps investors pass on more of their wealth while targeting growth by investing in companies listed on the Alternative Investment Market (AIM).
Octopus AIM Inheritance Tax ISA
Investors with large ISA pots can protect more of their wealth from inheritance tax while keeping it in an ISA wrapper.
Contact our team
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