Effective date of update: Actively frozen until 2030 

The thresholds for inheritance tax on estates have remained unchanged for more than 15 years, aside from the introduction of a residential nil rate band. These rates have now been frozen once more until April 5, 2030. Estates can benefit from a nil rate band of £325,000, along with an additional residential nil rate band of £175,000. This means individuals can claim a total of £500,000, while married couples can combine their allowances for a total of £1 million. 

 

Inheritance Tax on Business Property Relief and Agricultural Property Relief (BPR/APR) 

Effective date of update: April 2026 

BPR and APR are currently offered at a full 100% relief without any cap, provided the criteria are met. This relief will continue at the current rates for the initial £1 million of value, but any amount exceeding that will only receive a 50% relief. Consequently, any value above £1 million will be subject to a 20% tax.  

Additionally, the relief rate for investments on the Alternative Investment Market (AIM) will be decreased from 100% to 50%. 

 

Inheritance Tax on Unused Pension Funds and Death Benefits 

Effective date of update: April 2027 

As it stands, the majority of pensions are not considered when calculating Inheritance Tax for an estate. However, starting from April 6, 2027, any unused pension funds will be included in an individual's estate assessment and will be subject to Inheritance Tax. With the thresholds remaining unchanged prior to the tax being applied, this change could result in a considerable increase in the number of estates that will incur Inheritance Tax liabilities. 

If you believe any of these changes could affect you, reach out to us today at marketing@astonshaw.co.uk to schedule a private conversation about your future planning. Whether you're interested in Business Property Relief, Agricultural Property Relief, or want to understand the effects of your unused pension, our experts are ready to assist you in becoming more efficient and preparing for what lies ahead.