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The 7-year gifting rule was not extended to 10 years, and no lifetime gift cap was introduced. The main changes announced were Infected Blood compensation becoming IHT exempt and APR/BPR relief now transferable between spouses. Previously announced changes (pensions into IHT from April 2027) are proceeding as planned.
Chancellor Rachel Reeves delivered the Autumn Budget on 26 November 2025. This guide explains what was actually announced, what the rumours got wrong, and what it all means for bereaved families.
Average reading time: 12 minutes • Updated: 26 November 2025
Despite months of speculation, the Chancellor did not extend the 7-year gifting rule, introduce a lifetime gift cap, remove taper relief, or scrap the residence nil-rate band. The main inheritance tax changes announced last year will proceed as planned.
If you're administering an estate, the rules you need to follow are largely the same as before. The major changes announced in last year's Budget (pensions into IHT from April 2027, APR/BPR cap from April 2026) are proceeding as planned. No surprise changes were introduced.
| Date | Change | Status |
|---|---|---|
| Now | 8.75% interest on unpaid IHT | In effect |
| Now | Infected Blood payments IHT exempt | NEW |
| April 2026 | APR/BPR capped at £1m for 100% relief | Confirmed |
| April 2026 | AIM shares relief reduced to 50% | Confirmed |
| April 2027 | Pensions brought into IHT | Confirmed |
| Until 2030 | Nil-rate bands frozen at £325k/£175k | Confirmed |
One of the significant new announcements affects families of victims of the Infected Blood scandal. The Chancellor announced that all payments from the Infected Blood compensation scheme will be exempt from inheritance tax, regardless of how they are passed down.
Previously, while the initial compensation payment was tax-free, if the recipient died their family would face inheritance tax on any remaining funds. This has now been corrected.
The Infected Blood scandal saw over 30,000 people infected with HIV and hepatitis C through contaminated blood products between the 1970s and 1990s. The government has set aside £11.8 billion for compensation, with £1.35 billion already paid out.
Despite tractor protests in Whitehall during the Budget speech, the Chancellor did not announce any changes to the agricultural and business property relief reforms announced last year. From April 2026:
For more detail on how this affects farming families, see our guide: Farm Inheritance Tax: APR and BPR Changes Explained
The major change bringing unused pension funds into the scope of inheritance tax from April 2027 is proceeding as planned. This remains one of the most significant changes for bereaved families.
The government has not addressed concerns about potential double taxation on inherited pensions. If the deceased was 75 or over, beneficiaries may face both IHT (40%) and income tax (up to 45%) on inherited pension funds - potentially losing over 60% to tax.
For detailed information, see our guide: Pensions and Inheritance Tax: The 2027 Changes Explained
The inheritance tax thresholds remain frozen:
HMRC collected a record £8.2 billion in inheritance tax in 2024/25, rising to a forecast £9.1 billion in 2025/26. The freeze continues to pull more estates into paying IHT each year.
For more detail, see our guide: Inheritance Tax Thresholds Frozen Until 2030
| Allowance | Amount | Notes |
|---|---|---|
| Nil-Rate Band | £325,000 | Everyone |
| Residence Nil-Rate Band | £175,000 | Family home to descendants |
| Individual Maximum | £500,000 | With qualifying property |
| Married Couple Maximum | £1,000,000 | Transferable allowances |
| Tax Rate | 40% | 36% if leaving 10%+ to charity |
Current IHT thresholds, who needs to pay, exemptions, and how to calculate what's owed on an estate.
From April 2027, unused pension funds will be subject to inheritance tax. Learn what's changing and how it affects bereaved families.
From April 2026, Agricultural Property Relief is capped at £1 million. Learn how this affects family farms and what executors need to know.
How gifts before death are taxed, taper relief rates, exempt gifts, and what executors need to report on IHT forms.
The IHT nil-rate band has been frozen at £325,000 since 2009. Learn how fiscal drag affects estates and what it means for families.
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