This week’s Budget ushered in a large number of tax reforms as Chancellor Rachel Reeves seeks to balance the Treasury’s books.
Here experts from law firm Thrings look at some of the key changes. 
Inheritance Tax
The inheritance tax (IHT) threshold freeze remains for a further two years to 2030.
That means the first £325,000 of any estate can be inherited tax-free, rising to £500,000 if the estate includes a residence passed to direct descendants, and £1m when a tax-free allowance is passed to a surviving spouse or civil partner.
Ben Coulson, partner in Thrings’ succession and tax team, pictured above, said: “Whilst not unexpected, the Inheritance Tax freeze being extended for a further two years isn’t good news as, coupled with inherited pensions being brought into the regime, it is very likely that estates will be paying more than they had previously.
“The changes to pensions also mean they will become a less tax-efficient vehicle.”
Inheritance Tax – Agricultural Property Relief and Business Property Relief 
From April 2026, the first £1m of combined business and agricultural assets will continue to attract no Inheritance Tax at all, but for assets over £1m, inheritance tax will apply with 50% relief, at an effective rate of 20%.
Samantha Doherty, partner in Thrings’ succession and tax team, pictured, said for any farming business that owned land and property, there was a good chance that estate would exceed the £1m asset value threshold and the existing nil-rate bands.
“A lot of these businesses won’t have the cash readily available and so the Inheritance Tax bill will potentially jeopardise the business, especially if they are hit hard by the increase in interest rates on instalment payments from HMRC,” she added.
“These changes don’t come in for another 18 months. As such, succession planning is now more important than ever to ensure the next generation is able to take over a viable business that isn’t hamstrung by the financial burden of Inheritance Tax.”
Capital Gains Tax 
Capital Gains Tax (CGT) increased immediately after the Budget, with the lower rate rising from 10% to 18% and the higher rate from 20% to 24%.
Alex Pinhey, partner in the Thrings commercial property team, pictured, said the prospect of a significant hike in property-related CGT had caused plenty of tension in the commercial real estate sector in recent months.
“While this will be unwelcome for many investors, it is not as big a rise as was expected. Those who managed to complete sales before today’s announcement will no doubt still be quite relieved,” he said.
John Richardson, partner in the corporate team, added: “An increase to CGT on shares and business assets was widely anticipated and in reality, this was not as bad as some feared.
“Whilst this is an increase, it is still lower than a number of leading European economies, keeping it relatively low by international standards.”
Stamp Duty 
The Budget increased the Stamp Duty Land Surcharge for second homes by 2% to 5% with immediate effect.
Alice Altounyan, partner in the Thrings’ residential property team, pictured, said: “A change in Stamp Duty was not completely unexpected, but there will be concerns over how this will affect the second home market – including buy-to-let and holiday homes – and whether this will have a knock-on effect on rents.
“It is also important to note that the Chancellor did not announce any extension to the current Stamp Duty holiday, which was introduced in September 2022 and is set to end in March 2025.
“This will affect almost all buyers and so we expect a rush next year on transactions looking to complete before April 2025.”
