Agricultural Property Relief and Business Property Relief

"Families with farming and business interests were looking for reassurance that succession planning would remain viable in the long term as there has been some unease that the limitations on reliefs could significantly affect family farms and businesses, making succession difficult if the farm or business is above the threshold of £2.5 million (or £5million if the combined allowance is available).

 "The concern remains that some farming and business families could face significant inheritance tax liabilities without a straightforward way of funding them as their value is tied up in assets not available cash. Our clients hoped that the Budget would provide greater reassurance that successful family enterprises would not be forced into selling to meet tax obligations. 

 "Many landowners and business owners continue to question whether recent changes to reliefs fully reflect the realities of modern asset values. There was a lot of talk about growing business in Britain, but there is still concern about the new IHT Business Property Relief rules/thresholds and it doesn’t seem that this is going to change. The Budget missed the chance to address worries that rising land prices and business valuations may increasingly create succession challenges for traditional family enterprises and discourage the younger generation from taking these on. This won’t be beneficial for the economic growth of the country as a whole.

 "What our clients wanted from this Budget was more confidence that they could pass businesses and farms to the next generation without creating additional financial strain or uncertainty.” 

Inheritance tax and pensions

"The Budget fell short on providing assurances to families that they can pass on to families the pensions and other savings they worked hard to accumulate for their future financial security. Our clients will remain concerned about how inheritance tax will be administered where pension assets sit outside the estate, but may still be needed to settle tax liabilities. Without clearer guidance, there is a risk of delays, increased costs and additional stress for families while also dealing with their own bereavement.

 "One of the key omissions from the Budget was greater detail on how the planned pension inheritance tax changes will work in practice. Clients want reassurance that executors will have access to the information they need to administer estates efficiently, rather than facing potentially lengthy delays while tax positions are confirmed. Instead, there are a lot of questions still unanswered. We’re continuing to hear concerns that complexity surrounding the new rules could discourage long-term pension savings if people fear more of their retirement wealth will ultimately be lost to tax, rather than it passing to chosen loved ones.”

Inheritance tax and estate planning

"Unlike previous years, we’ve found that a lot of clients wanted to postpone any estate planning changes until after the budget this year because they were waiting for clarity on inheritance tax, gifting and succession planning.

 “Unfortunately, there was little good news. Clients would have welcomed more detail on how families will be protected from unintended consequences of the new pension rules, particularly where a spouse or dependent needs money quickly for household expenses, maintenance or day-to-day living costs they can’t otherwise meet. High inflation is just adding to this impact.

 "For many families, the biggest disappointment was the lack of change on inheritance tax thresholds, which have remained unchanged for years and don’t reflect current economic conditions. Clients were hoping that the government might realise that it’s actually ordinary families that are increasingly being affected by a tax that was once aimed at a much smaller proportion of estates.”