Changes to Inheritance Tax from April 2025

Individuals, families, and estate planners preparing for the upcoming Inheritance Tax (IHT) changes taking effect from April 2025.

Provides a clear summary of the planned adjustments to IHT allowances, nil-rate bands, and reliefs, helping executors and planners anticipate tax implications for estates. Consulting a tax advisor can ensure your estate planning reflects the upcoming changes.

Awareness of these changes ensures proper estate planning and compliance with HMRC requirements, avoiding potential IHT liabilities. Working with experienced accountants can help implement these changes efficiently.

Overview of IHT Changes

From April 2025, several key changes will affect Inheritance Tax planning.

• Adjustments to IHT nil-rate bands and residence nil-rate bands (RNRB)
• Revisions to IHT reliefs including business and agricultural property relief
• Updated rules for pensions included in IHT calculations

Nil-Rate Bands and RNRB

The IHT nil-rate band and residence nil-rate band thresholds will continue to be key considerations for estate planning. Executors must account for these thresholds when calculating tax liabilities.

Business and Agricultural Reliefs

Changes to IHT reliefs for business and agricultural assets will affect estates that include these qualifying assets. Executors need to understand how 50% or 100% reliefs apply post-April 2025.

Pension Inclusion in IHT

From April 2025, unused pension funds and death benefits will be considered part of the estate for IHT calculations. Pension administrators may be required to report and pay IHT on these funds.

Planning and Compliance Considerations

• Review estate plans to account for updated IHT allowances and reliefs
• Ensure accurate reporting to HMRC for all qualifying assets
• Consider the impact on lifetime gifts and exemptions
• Prepare documentation for executors and trustees to minimise potential IHT liabilities

Understand Changes to IHT from April 2025 with Cigma Accounting

From April 2025, new Inheritance Tax rules will impact estate planning and the application of reliefs, making it essential to review your estate strategy in advance. Misunderstanding these changes can lead to unnecessary tax liabilities or missed opportunities. At Cigma Accounting, we support clients across Farringdon, Liverpool Street, and Aldgate in preparing for the upcoming changes with guidance from a trusted tax accountant in London.

Whether you are reassessing nil rate bands, residence reliefs, or planning lifetime transfers, professional advice ensures compliance while optimising available reliefs. Cigma Accounting provides tailored inheritance tax planning London to help clients manage estates efficiently and minimise IHT exposure, with physical offices across London.