Autumn Budget 2024 IHT Changes Calculator

Three major IHT changes: (1) BPR and APR capped at £1M combined from April 2026 (100% below, 50% above). (2) Pension funds (uncrystallised and drawdown) included in estates from April 2027. (3) The nil-rate band remains frozen at £325,000 until 2030.

The BPR/APR £1M cap takes effect for deaths on or after 6 April 2026. The pension IHT change takes effect for deaths on or after 6 April 2027. These are phased, giving some lead time for planning.

People with large pension pots (particularly those who have deliberately avoided drawdown to pass on a pension IHT-free), higher-rate taxpayers who have maximised pension contributions for estate planning reasons, and anyone who used pension accumulation as part of their estate plan.

Business owners with companies valued above £1M, farmers with agricultural land worth over £1M, and investors holding AIM shares or other qualifying business property above the threshold — especially those with little other planning in place.

No. The nil-rate band (£325,000) and residential nil-rate band (£175,000) remain frozen until at least 2030. This means fiscal drag continues — as house prices rise, more estates are pulled into the IHT net.

You can draw down pension income before April 2027, but you will pay income tax on withdrawals (potentially at 40-45% if a higher-rate taxpayer). Whether this is better than 40% IHT depends on your income level, available nil-rate bands, and intended beneficiaries.

Annuities in payment cease on death (or provide a spouse's annuity at a reduced rate). There is no capital value, so they are not affected by the IHT change. Only pension pots with remaining capital are brought into the estate.

Act before April 2026: Review BPR/APR structures, consider lifetime gifts of qualifying assets to use the 7-year PET rule, write pensions in trust where possible, maximise spouse ownership of BPR/APR assets (each has their own £1M allowance), and review life insurance arrangements.