The Spring Statement
2026
Inheritance Tax Rates
Such shares have been marketed as tax shelters; anyone who has invested in them to reduce their IHT exposure needs to take advice on the effect of the changes.
The IHT nil rate band has been fixed at £325,000 since 6 April 2009. The Chancellor has extended the freeze on this figure until the end of 2030/31. Holding the threshold at the same amount for 22 years will bring far more people into the scope of the tax. The 2025 Budget document stated that IHT raised £8.3 billion a year at the start of this Parliament; this is expected to rise to £14.5 billion in 2030/31. The £175,000 ‘residential nil rate band enhancement’ on death transfers (also frozen, together with the £2 million value of estate above which it is tapered) can reduce the impact of IHT, where it applies. A married couple may be able to leave up to £1 million free of IHT to their direct descendants (£325,000 plus £175,000 from each parent), but the rules are complicated, and the prospect of the nil rate band being fixed for another 5 years increases the importance of proper IHT planning. As the government expects to nearly double the amount it receives in IHT by the end of the decade, it is a good time to review your exposure to the tax. A review should make sure that your will is up to date and takes account of the current and future changes, which include bringing undrawn pension funds into charge from 6 April 2027 (described later). Agricultural and business property The Chancellor announced in 2024 that 100% agricultural and business reliefs would be restricted from 6 April 2026. After a campaign by farmers and business owners, in December the government gave a little ground on the values affected, but not the principle: there will still be a substantial increase in exposure to IHT on many farms and businesses from that date. 100% relief will be restricted to £2.5 million of the total of qualifying agricultural and business property (rather than £1 million as originally announced), with 50% relief on any higher value. It was newly announced last November that the 100% allowance will be transferable between spouses, if it is not used on the first death. These changes could potentially create significant IHT liabilities for family farming and trading businesses in the future, including where business assets are held in trust. All businesses should consider their IHT position, including reviewing wills and considering whether some lifetime gifts of qualifying property may be worthwhile. Also from 6 April 2026, qualifying shares quoted on the AIM and similar ‘unlisted’ markets will qualify for 50% relief rather than the current 100% relief.
Business rates Revaluations Every three years, the Government reviews the rental values of business properties in England and Wales. The next revaluation starts on 1 April 2026. A rateable value (RV) is an estimate of the yearly rent for your property. For the 2026 revaluation, rental values from 1 April 2024 will be used: some properties’ RV will increase, some will decrease. The liability to business rates is determined by applying a ‘multiplier’ to the rateable value. From 1 April 2026, business rates are moving from two multipliers to five, reflecting business type and property value. These were confirmed in the Autumn Budget 2025. The new Retail, Hospitality & Leisure (RHL) multipliers replace the former annual Retail, Hospitality & Leisure relief. Category of property Multiplier Small Bus RHL: RV less than £51,000 38.2p Standard RHL: RV £51,000 to £499,999 43.0p Small Bus (non-RHL): RV less than £51,000 43.2p Standard (non-RHL): RV £51,000 to £499,999 48.0p High Value (all types): £500,000 or more 50.8p Transitional Relief scheme (2026 to 2029) The Transitional Relief scheme is designed to help businesses whose bills rise significantly because of changes in their RV following the 2026 revaluation. Transitional relief phases in the increase, so that businesses are protected from sudden, unaffordable rises in their rates bills. The Government has set annual percentage caps on how much a bill can rise
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