Latest Budget: Chancellor unveils biggest tax budget since 1993 – boost to employers’ national insurance highlighted

The Chancellor next turns to inheritance tax, which “just 6% of estates” will pay this year.

Rachel Reeves told the House she understood the “strong desire to pass on savings to children and grandchildren” so she was taking a “balanced approach”.

The first measure concerns inheritance tax thresholds – they were frozen until 2028, but will now be extended until 2030.

“This means the first £325,000 of any estate can be inherited tax-free,” she says, “up to £500,000 if the inheritance includes a residence passed on to direct descendants and £1 million.” if the tax-free benefit is transferred to an heir.” surviving spouse or civil partner.”

Second, the Chancellor announces that Labor will “close the loophole created by the previous government (which became even larger when the lifetime allowance was scrapped) by including inherited pensions in inheritance tax from April 2027.”

Finally, they reform farm property and business assistance programs.

She tells the House: “From April 2026, the first £1 million of combined business and agricultural assets will continue to be free from inheritance tax at all, but for assets valued at more than £1 million, inheritance tax will apply at 50% effective relief. rate. 20%”.

“These measures will raise more than £2 billion in the final year of the forecast,” the Chancellor adds.