Chancellor Rachel Reeves confirmed that the Labour government would extend the current inheritance tax threshold freeze for a further two years to 2030.

This means the first £325,000 of any estate can be inherited tax-free, rising to £500,000 if the estate includes a residence passed to direct descendants, and £1m when a tax-free allowance is passed to a surviving spouse or civil partner.

However, the Chancellor outlined reform to agricultural property and business property relief.

She told the House:  “From April 2026, the first £1m of combined business and agricultural assets will continue to attract no inheritance tax at all, but for assets over £1m, inheritance tax will apply with 50% relief, at an effective rate of 20%.”

Reeves said these measures would raise over £2bn.