For those with estates, businesses, and ambitions that span generations, the Autumn Budget is more than numbers – it’s a roadmap for protecting your legacy.
While sweeping reforms were anticipated, the Chancellor stopped short of the most radical changes. This offers a valuable window for high-net-worth individuals to act strategically before new rules reshape the landscape.
Lifetime Gifting: Why acting now matters
Speculation around extending the seven-year rule for gifts and introducing a lifetime cap on Potentially Exempt Transfers (PETs) proved unfounded – for now. Holdover relief for Capital Gains Tax (CGT) also remains intact, as does the CGT ‘base cost uplift’ (see more on this later in the article).
This is welcome news for families considering lifetime transfers of wealth. The current framework still allows for effective gifting strategies, but with reforms to Agricultural Property Relief (APR) and Business Property Relief (BPR) due to come into force in April 2026, timing is critical. Acting now could mean the difference between preserving wealth and losing significant relief.
Business & Agricultural Relief: What’s changing
The Autumn Budget 2024 introduced a £1 million allowance of combined agricultural and business property per person for the full 100% relief from inheritance tax (IHT), with 50% relief from IHT on qualifying assets above this allowance. Prior to these reforms, there had been no limit to the value of qualifying assets that could be relieved from IHT by APR and BPR.
The Autumn Budget 2025 confirmed that any unused £1 million allowance for APR and BPR will be transferable between spouses and civil partners, much like the Nil Rate Band (NRB) and Residence Nil Rate Band (RNRB). This is positive, but tightening of qualifying conditions from April 2026 means proactive planning is essential.
Clients with farming or business interests should review ownership structures now to maximise relief before restrictions bite and consider opportunities for passing wealth down to the next generation sooner rather than later, where this aligns with the overarching succession strategy. Waiting could result in unnecessary tax exposure or even future forced asset sales.
Farming families: Protecting land and legacy
For farming families across the South West, these changes are acutely significant. APR remains a cornerstone of succession planning, but reforms could impact diversified farming businesses or land held in complex structures. Particularly as the £1 million allowance is a combined allowance, limiting the availability of BPR also.
Key considerations for farming families:
- Review ownership and partnership agreements to ensure APR and BPR eligibility under new rules.
- Consider lifetime transfers whilst current reliefs apply – especially for land and farmhouses.
- Factor in potential CGT exposure and seek appropriate advice when restructuring or gifting assets.
Farming is often tied to family identity and multi-generational livelihoods. Our team specialises in strategies that safeguard both the business and the family legacy, ensuring continuity for future generations.
Capital Gains Tax (CGT): Stability for now
The feared overhaul of CGT holdover relief did not occur, preserving a key tax deferral tool for lifetime disposals of qualifying assets. This comes as a welcome relief to all those looking to plan and restructure ahead of the changes to the APR/BPR reforms in April 2026.
However, with rates on residential and non-residential property set to rise, timing disposals remains critical. Strategic use of trusts and corporate structures can still deliver efficiency under the current regime.
Pensions: A hidden tax trap ahead
From April 2027, undrawn pension funds will form part of the death estate for inheritance tax purposes – a fundamental shift in planning. For clients with substantial pension pots, there is still time to draw down and gift funds under existing rules, but early action is advisable to avoid future tax exposure.
Future-proofing family wealth: Prenuptial and postnuptial agreements
While tax planning and succession strategies are essential, they are only part of the picture. For families with significant assets – whether country estates, farms, or business interests – prenuptial and postnuptial agreements offer an additional layer of protection and should be made before transferring assets down the generations.
These agreements set clear expectations and can ring-fence inherited wealth, business shares, and agricultural land from future claims in the event of divorce. For farming families, where land often represents generations of heritage, this can be critical to avoid fragmentation of the estate.
Including these agreements as part of your private wealth planning ensures that your legacy remains intact, regardless of personal circumstances. Our Family Law team works closely with our Private Wealth specialists to create tailored agreements that complement your overall strategy.
Key Action Points – What you should do now
1. Accelerate lifetime gifting whilst PET rules remain unchanged
The current rules still allow for PETs to fall outside your estate for IHT purposes if you survive seven years from the date of the transfer. With speculation about future restrictions, now is the time to make strategic gifts – whether to children, grandchildren, or other individuals. Acting early can start the clock and reduce the risk of future tax exposure.
2. Review business and agricultural assets ahead of APR/BPR reforms in April 2026
Agricultural Property Relief (APR) and Business Property Relief (BPR) are vital tools for passing on farms and businesses tax-efficiently. From April 2026, qualifying conditions will tighten, potentially excluding certain diversified or non-core activities, and limiting the maximum value to be relieved 100% from IHT on death to £1 million per person. Reviewing ownership structures, partnership agreements, your Wills and wider succession plans now will give you the opportunity to maximise relief before the changes take effect.
3. Consider pension drawdown strategies before April 2027
Currently, undrawn pension funds can pass outside your estate for IHT purposes. From April 2027, this advantage disappears, and pensions will be included in the taxable estate. For those with substantial pension pots, drawing down and gifting funds under existing rules could save significant tax. Early planning is essential to avoid a future liability.
4. Plan CGT disposals to manage exposure under current rates
Capital Gains Tax rates on property and other assets are set to rise. If you are considering selling or restructuring investments, timing matters. Disposing of assets under the current regime could reduce your tax bill substantially. Using trusts or corporate structures may also help manage exposure and preserve flexibility.
5. Monitor developments on APR/BPR transferability for future planning
The introduction of transferability between spouses and civil partners is a positive step, but the detail is still emerging. Keeping informed will allow you to adapt your plans and take advantage of new opportunities as they arise. Our team can help you navigate these changes and ensure your strategy remains robust.
Why act now?
The Autumn Budget 2025 offers clarity and breathing space, but the clock is ticking. With major changes on the horizon, now is the time for bespoke planning to preserve wealth across generations.
As a leading South West law firm, we are here to support our clients through these challenges – helping them achieve their ambitions and protect their legacies for the future.
Contact our Private Wealth team for tailored advice on succession planning, tax efficiency, and safeguarding your family’s future.