Inheritance Tax Planning with a Wills and Probate Solicitor

Rachel Reeves 2024 Budget brought significant changes to Inheritance Tax. The Government estimates that these changes will impact around 49,000 estates, with around 10,500 of those estates brought into Inheritance Tax for the first time.

These changes mean that many people will need to review their existing inheritance tax planning. Many others will now have to consider inheritance tax planning for estates that would previously have been comfortably exempt.

Fortunately, the experienced Wills and Probate solicitors at Holdens Law are on hand to help you to make efficient, tax-effective plans for your estate that take into account all the new changes. With their help, you can find ways to structure your finances to ensure that your family, and other beneficiaries, enjoy the maximum benefit from all your hard work, and pay the correct tax on your estate.

What are the changes?

The 2024 Budget included a number of significant changes that will affect inheritance tax planning. These include:

• The freeze on Inheritance Tax thresholds extended to 2030
• The inclusion of private pensions in estate valuations from 2027
• The inclusion of AIM shares at 20% tax (not protected by your thresholds)
• The reduction of agricultural and business property relief

While these changes may only affect around 49,000 estates, they are estimated to raise £4bn per year. This is a significant sum, so if the changes include your estate, it is vital that you contact the Wills and Probate solicitors at Holdens Law as soon as possible to get your affairs in order and optimise your inheritance tax planning.

Changes to agricultural property relief

One of the largest changes for Holdens Law clients in Lancashire and Cumbria is the change to agricultural property relief. The changes come into force from April 2026, and will mean the following tax structure:

• The first £1m of agricultural property remains tax free
• The personal allowance of £325,000, plus £175,000 for property passed to direct descendants also applies
• This means that if both parents die at the same time, their children (or grandchildren) can inherit up to £3m of agricultural land tax free
• Above this threshold, the inheritance of agricultural land is taxed at 20%
• Unlike other inheritance tax, tax due on agricultural land can be paid in instalments over ten years interest free

The new inheritance tax on agricultural land is only expected to impact the wealthiest 500 estates and has been introduced to make the system fairer. ‘The government is better targeting these reliefs to make them fairer, protecting small family farms,’ says gov.uk. Currently the top 7% of farm estates claim 40% of the available inheritance tax relief, while the top 2% claim a huge 22%.

Planning for the future

“With more people now liable, in more ways, for more inheritance tax, it has never been more important to plan ahead,” says Jennifer Larton from Holdens Law, Wills and Probate solicitors. “We can help with all aspects of inheritance tax planning to ensure that you get to pass on as much of your estate as possible to your loved ones.

“As local Wills and Probate solicitors serving a largely rural community, Holdens understand the impact of the Inheritance Tax changes and can help local farmers to better prepare for the future.”

As Lancaster’s leading Wills and Probate solicitors, Holdens Law can help you to create tax-efficient trusts, as well as advising on gifts and charity donations.

These important changes come into force very soon, so you need to start inheritance tax planning, or review your existing plans, today. To find out more about inheritance tax planning with your local Wills and Probate solicitor, contact Holdens Law today on 01524 32484 for Lancaster or 01539 720629 for our Kendal office.