Chancellor Rachel Reeves Announces Inheritance Tax Changes

Chancellor Rachel Reeves announced significant changes to inheritance tax (IHT) in her maiden Budget, which will affect pensions and family businesses. Starting in 2027, pension pots will be included in estates for IHT calculations, potentially subjecting many grieving families to a 40% death duty for the first time. Additionally, the Chancellor is reforming tax reliefs for agricultural and business properties, capping business relief at £1 million and implementing a 50% relief for assets exceeding that threshold. Reeves also plans to increase the tax on carried interest from private equity profits to 32%, still below the feared 45% rate. These changes aim to raise funds while ensuring that small family farms remain protected. The IHT threshold will remain frozen until 2030, continuing to impact how estates are taxed upon death.