Three changes to inheritance tax announced - from pensions to relief

Chancellor Rachel Reeves has announced three changes to inheritance tax. Labour Party Chancellor Ms Reeves said that the inheritance tax personal allowance threshold will be extended until 2030, and inherited pensions will now be included in inheritance tax.

Her third and final change will she her reform agricultural and business relief from April 2026. After the inheritance tax shake-up, Rishi Sunak has accused the Chancellor Rachel Reeves of “fiddling the figures”, telling the Commons: “She specifically told the British people she wouldn’t change the debt target because, and I quote she said, ‘I’m not going to fiddle the figures to get better results’.

“But that is exactly what she has done. She has gone back on her word and fiddled the figures so that she can borrow billions more. Broken promise after broken promise, and working people will pay the price.” He added: “Now, the reason the Chancellor has increased borrowing and increased taxes is because she has totally failed to grip public spending.

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“First, she has no meaningful plan to deliver the £20 billion-worth of savings available if the public sector returned simply to its pre-pandemic levels of productivity. Instead, one of the first things the Chancellor did was to hand out inflation busting pay rises to the unions without getting any productivity enhancing reforms in return.”

The former Prime Minister Mr Sunak continued: “The Chancellor has no plan to control welfare spending. Yet, if we simply got working age welfare spending on people with a disability or health condition back to pre-Covid levels, that would free up £30 billion-worth of savings.

“So whether it is scrapping our plans to shrink the Civil Service or their failure to control welfare spending. This is not her inheritance, these are her choices, and the result, higher spending, higher borrowing, higher taxes.”