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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.
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 the previous year went ahead.
If you're administering an estate, the rules you need to follow are largely the same as before. The major changes announced in the previous year's Budget (pensions into IHT from April 2027, the APR/BPR allowance from April 2026) went ahead, though the size of the APR/BPR allowance changed after this Budget.
| Date | Change | Status |
|---|---|---|
| Now | 7.75% interest on unpaid IHT (from 9 January 2026) | In effect |
| Now | Infected Blood payments IHT exempt | NEW |
| April 2026 | APR/BPR capped at £2.5m for 100% relief | Confirmed |
| April 2026 | AIM shares relief reduced to 50% | Confirmed |
| April 2027 | Pensions brought into IHT | Confirmed |
| Until 2031 | Nil-rate bands frozen at £325k/£175k; taper threshold £2m | Confirmed |
One of the new announcements affects families of victims of the Infected Blood scandal. The government said it would legislate to extend the existing relief from inheritance tax for payments under the Infected Blood Compensation Scheme and the Infected Blood Interim Compensation Payment Scheme. The relief covers compensation received by first living recipients, and applies to payments made before as well as after 26 November 2025.
A recipient also has 2 years in which to gift the compensation on without an inheritance tax charge arising, for gifts made on or after 4 December 2025. It is not an open-ended exemption that follows the money however it is subsequently passed on.
The Infected Blood Inquiry found that people were infected with HIV and hepatitis C through contaminated blood and blood products between the 1970s and 1990s. The government has set aside £11.8 billion for compensation. Figures for the amount paid out change continually and are published by the Infected Blood Compensation Authority rather than here.
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:
The allowance announced at this Budget was £1 million. On 23 December 2025 the government raised it to £2.5 million, and that is the figure that took effect on 6 April 2026 under Finance Act 2026. A couple can therefore pass up to £5 million of qualifying agricultural and business assets at 100% relief, on top of the nil-rate bands.
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 thresholds were already fixed to 5 April 2030. This Budget fixed them for a further year, to 5 April 2031:
HMRC's annual receipts bulletin records inheritance tax receipts of £8.5 billion in 2025 to 2026. The freeze continues to pull more estates into paying IHT each year: HMRC estimates the additional year adds 1,400 taxpaying estates in 2028 to 2029 and 2,900 in 2029 to 2030, against raising the thresholds by CPI.
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% where 10%+ of the baseline amount passes to charity |