Spring Statement 2025 Update

The Chancellor’s Spring Statement has reinforced many of the changes announced in the Autumn Budget but provided little further clarity particularly around Inheritance Tax (IHT) and pensions.

Inheritance Tax and Estate Planning

Despite concerns from business owners and farmers, no updates were provided on IHT reforms, including the planned inclusion of pension pots in taxable estates from 2027. With IHT revenues now expected to reach £67 billion by 2029/30, proactive estate planning remains crucial. Business and agricultural asset holders should prepare for the upcoming 2026 cap on relief exemptions, which will see assets above £1 million taxed at an effective rate of 20%.

ISA Reforms Under Consideration

The government is reviewing potential changes to Individual Savings Accounts (ISAs) to encourage investment in stocks and shares over cash savings. While no immediate adjustments were announced, speculation suggests future limits on cash ISAs could be introduced. Current ISA limits will remain at £20,000 until 2029/30, despite inflation reducing their value.

Capital Gains Tax and Business Taxation

Capital Gains Tax (CGT) changes from last year remain in effect, with rates at 18% (basic rate) and 24% (higher rate), and the tax-free allowance reduced to £3,000. Business owners should also note the Business Asset Disposal Relief rate will rise from 10% to 14% in April 2025, increasing tax liabilities on qualifying disposals.

Looking Ahead

While the Spring Statement provided no new tax announcements, it left many questions unanswered. For those with estates, businesses, or investments impacted by these changes, thoughtful estate planning remains essential.

If you would like to discuss how these updates affect you, contact our friendly team to review your estate planning strategy.