The October 2024 Budget announced incoming restrictions on previously unlimited inheritance tax (IHT) reliefs with a headline allowance of £1m of full relief per taxpayer. Through the consultation paper recently published HMRC has now provided more detail on the proposed application of the new rules. The consultation focuses on how the changes interact with existing trust tax legislation and provides clarity on how the new £1m allowance will operate on lifetime gifts in the death estate and for trusts created during the lifetime of a business owner.
If there is a key takeaway it’s that business owners and farmers may be able to reduce substantially their exposure to IHT with forward planning to maximise the use of available allowances for agricultural property relief (APR) and business property relief (BPR). Once that exciting news has settled and the devilish detail is examined it seems...
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