The 2024 Autumn Budget: impact on inheritance and property
Private client partner Tero Pirinen and residential property solicitor Martin Whitehorn discuss the 2024 Autumn Budget’s impact on inheritance and property.
Is inheritance tax affected?
While the current inheritance tax rates are unchanged and the nil-rate bands are fixed until 5 April 2030, unused pension funds and pension death benefits will form part of a person’s estate for inheritance tax purposes from 6 April 2027.
Therefore the first £325,000 of an estate would still generally be free of inheritance tax, increasing to £500,000 if the main residence is inherited by direct descendants. This tax-free allowance can be inherited by a surviving spouse or civil partner to double their own allowance.
Agricultural property relief and business property relief are currently 100% (entirely free of inheritance tax) with potentially no limit on the value to which these reliefs are applied, but from 6 April 2026 these 100% reliefs will only apply to the first £1 million of combined agricultural and business property in an estate, with the relief dropping to 50% over that £1 million. 50% relief will also apply to alternative investment markets (AIM) shares.
More immediately, from 6 April 2025 land managed under an environmental agreement with a public body and certain other approved organisations will fall under the scope of agricultural property relief.
What about capital gains?
Capital gains tax will increase for disposals made on or after 30 October 2024, the lower rate rising from 10% to 18% and the higher rate from 20% to 24%, whether on property or other assets.
Is that the only effect on property?
The Chancellor mentioned that from 31 October the higher rates for additional dwellings surcharge on stamp duty land tax would increase from 3% to 5%. Additionally the SDLT rate paid by corporate entities purchasing dwellings for over £500,000 has increased from 15% to 17%. Furthermore, Right to Buy discounts are due to be reduced.
Not addressed in the Budget but still worth mentioning is that the current threshold at which individuals start paying stamp duty land tax is due to drop from £250,000 to £125,000 from 1 April 2025.
Similarly first-time buyers’ relief on stamp duty land tax is due to drop from the current £425,000 threshold to £300,000 on 1 April 2025, with the maximum purchase price qualifying for first-time buyers’ relief to drop from £625,000 to £500,000.
Burley Geach can assist clients with inheritance tax and lifetime planning, trusts, wills, lasting powers of attorney, divorce, and residential and commercial property. To contact us, simply get in touch with our team or complete our enquiry form.
