The Autumn Budget 2025: key changes to IHT and CGT

Autumn Statement kept CGT and IHT unchanged, but APR/BPR relief rises in 2026. A timely moment for Estate, Will and Succession Planning reviews.

The dust has settled on the Chancellor's November Autumn statement. For weeks, the headlines were dominated by speculation. There were rumours of major changes to Capital Gains Tax (CGT) and Inheritance Tax (IHT), building on the significant changes announced in the October 2024 Budget. 

Yet, the reality was much quieter.  The Chancellor left the headline rates for CGT and did not announce any substantive changes to IHT. For many, this will be a welcome relief. However, reassurance should not lead to complacency and, as always, it is important to look at the detail of the announcements.

What didn’t change:

In the run-up to the Budget, the speculation surrounded two key areas: CGT and IHT.

The Chancellor raised CGT rates at the last Budget — increasing the lower rate from 10% to 18% and the higher rate from 20% to 24%. The annual personal allowance for CGT remains frozen at £3,000 and there were no major changes announced to CGT rates or allowances this year. 

The IHT nil-rate band remains frozen at £325,000 until April 2031.

The “freezing” of thresholds such as the nil-rate band for IHT and the annual CGT allowance will bring more people into the scope of IHT and CGT through ‘fiscal drag’. These thresholds have not increased with inflation, and as house prices and asset values continue to rise, the consequence is that more estates and gains will be subject to tax each year.

What did change:

Rumours had been circulating around Agricultural Property Relief (APR) and Business Property Relief (BPR) – these IHT reliefs are vital to farmers and business owners and significant changes to both reliefs were announced in the October 2024 Budget.

However, the news was more favourable than anticipated.  The Government announced on 23 December that from 6 April 2026, up to £2.5 million of the value of qualifying agricultural or business assets will benefit from 100% IHT relief – an uplift on the previous £1 million allowance. 

Another welcome piece of news is that the £2.5 million allowance will be transferable between spouses and civil partners. This is a surprising announcement given the government’s previous insistence that the allowance would not be transferable, but it is a very welcome extension.

Opportunities to take stock

In the run up to April 2026, it is a good time for individuals, particularly farmers and business owners, to proactively review their estate planning:

1. Gifting and trusts

The ‘seven-year rule’ for Potentially Exempt Transfers (PETs) remains the same for 2025/26, meaning no tax is payable on lifetime gifts if the donor survives seven years from the date of the gift and does not continue to benefit from the asset that is gifted. This means that strategic lifetime gifting is as relevant and effective as ever.

Trusts also continue to be a strong tool for asset protection and succession planning. It is still possible to use trusts to control when and how wealth is passed down to the next generation and to protect vulnerable beneficiaries.

2. Review and update Wills

For individuals who own agricultural and business assets, it is imperative that they review their Wills and succession planning, take professional advice on the changes to BPR and APR and ensure that their Wills utilise the available IHT reliefs and still achieve their ultimate aims.

If you, a family member, or a business partner are looking to review your succession and tax planning, please contact Chelsea Martin.

If you have any questions or we can assist, please contact any member of the Probate, Tax and Estate Planning team on 0113 244 6100.

You can also keep up to date by following Wrigleys Solicitors on LinkedIn.

The information in this article is necessarily of a general nature. The law stated is correct at the date (stated above) this article was first posted to our website.

Specific advice should be sought for specific situations. If you have any queries or need any legal advice please feel free to contact Wrigleys Solicitors.