Autumn Budget 2024: What the Changes Mean for You and Your Family’s Future

As we unpack the Labour Government’s 2024 Autumn Budget, we want to take a moment to address what it really means for you, your family, and the legacy you’re working so hard to protect. These new measures will impact inheritance tax, pensions, capital gains, AIM shares, Business Property Relief, and non-domicile tax status in ways that could change the way you plan for the future.

At Wills and Probate Services, we understand that this isn’t just about numbers or policies—it’s about your peace of mind and the well-being of your loved ones. Let’s walk through what’s new and what it might mean for your plans.

1. Inheritance Tax (IHT) Freeze: An Ongoing Challenge for Families

The decision to freeze Inheritance Tax thresholds until April 2030 means that IHT, a concern for many families, remains in place at a nil-rate band of £325,000, with the residence nil-rate band at £175,000. While this is unchanged, the impact of rising asset values might mean that more families face a tax burden on estates that wouldn’t have been taxable just a few years ago.

2. Pensions and Their Place in Your Estate Plan

The budget also makes a significant change starting in April 2027: unspent pension funds, a lifeline for some in later years, will now be liable for IHT upon death. This shift may affect families who have relied on pensions as a way to pass on their legacy tax-free. 

Pensions have been a strong pillar of retirement and inheritance planning, often viewed as a tax-efficient way to leave wealth for loved ones. However, the Budget’s changes mean that from April 2027, unused pension funds will count toward your IHT liability. This decision impacts families across the country, potentially leading to difficult conversations around revisiting long-standing financial strategies.

3. Capital Gains Tax (CGT): What the Rate Increase Could Mean

Another key change in the Budget is an increase in Capital Gains Tax (CGT) rates—from 10% to 18% at the lower rate and from 20% to 24% at the higher rate. If your family’s financial future includes assets that may be sold, these higher CGT rates could influence decisions about when and how to handle those transactions. This is especially relevant if you have investments in assets that are part of your estate planning.

The government has also outlined phased changes for Business Asset Disposal Relief (BADR) and Investors’ Relief (IR), bringing these rates to 18% by 2026. While the increases allow some time for adjustment, these changes make it important to review any plans to dispose of business assets and consider how it might affect your family’s inheritance.

4. AIM Shares and Business Property Relief (BPR): A Shift in Tax Efficiency

The Budget’s revisions to Business Property Relief could have a direct impact on those who have invested in AIM shares or agricultural assets as part of a tax-efficient legacy. While AIM-listed shares have previously been an IHT-efficient choice, the relief rate for these shares will now be set at 50%, affecting any inheritance strategy that includes AIM shares for tax savings.

With this change, the first £1 million of combined agricultural and business assets still qualifies for 100% relief, but any amount above that is only eligible for 50% relief. 

5. Non-Domiciled Status: A New Approach

For those with non-domiciled status, there’s a major change ahead. From April 2025, the UK will shift to a residence-based tax system, abolishing the remittance basis and instead offering a four-year grace period for relief from foreign income and gains. 

How We Can Help

Here at Wills and Probate Services, we recognise that these changes can feel overwhelming. Estate planning is about much more than tax—it’s about security, preserving memories, and passing on values. It has never been a more important time to plan for your future. Get in contact with Wills & Probate Services to see how we can help you to protect your legacy.

Frequently Asked Questions on the Autumn Budget 2024