The UK government has officially confirmed a significant change to inheritance tax rules, which could save families thousands of pounds when passing on property or assets to loved ones.
What’s Changing?
Under the new rules, the threshold for inheritance tax relief on family homes will be frozen at £1 million until 2028, rather than increasing with inflation as previously planned. This move is expected to raise additional revenue for the Treasury while easing the burden on families.
Who Benefits?
The change primarily affects those inheriting family homes, as the nil-rate band and residence nil-rate band remain unchanged. Couples can still pass on up to £1 million tax-free, but higher-value estates may face larger bills.
Why Now?
The decision comes amid growing pressure on public finances and follows years of debate over inheritance tax fairness. Critics argue the freeze will hit middle-class families hardest, while supporters claim it ensures wealthier estates contribute more.
What You Should Do
- Review your estate planning to ensure it aligns with the new rules.
- Consider gifting assets earlier to reduce potential tax liabilities.
- Consult a financial advisor for personalised advice.
The changes take effect immediately, so acting now could save your family significant sums in the long run.
