But why be so considerate with this group of people, while ignoring the plight of vulnerable people who appear to have been overlooked?
It’s not too late to address this problem. The government could step in and remove any unwanted or unforeseen consequences. For example, it could introduce a CGT exemption for recipients of awards of compensation or introduce an allowance for qualifying individuals similar to blind person’s allowance for income tax.
The chancellor has also announced plans to change disability benefits, with the aim of encouraging more people back into work. While people living with a disability often aspire to work, the reality is that they find it difficult to find a job and keep it without support.
For this reason, any changes made to these important benefits should be matched with funding for more schemes to support people with disabilities and inclusive employers. There are some great examples that could be used as a guide for effective implementation, such as Stand Out Socks and Café Domenica.
Moving on to the matter of inheritance tax – here, too, the announcements from the chancellor were not as onerous as expected in some areas.
The main change was to make inherited pensions liable for IHT from April 2027 – a decision that is intended to impact mainly wealthy individuals who have been boosting their pension savings in order to limit their IHT exposure, but it will undoubtedly affect many others too. Many estates that would previously have avoided IHT, will find that they now have a liability.
The chancellor also confirmed that the current freeze affecting the nil-rate and residential nil rate bands will be extended from 2028 to 2030, leading to yet more fiscal drag as property values continue to rise. Together, these changes will ensure that many more estates are liable for IHT at the standard rate of 40 per cent, and boost tax receipts accordingly.
As with other areas of taxation, some groups will be more concerned about the changes to IHT than others. The impact on farming families is especially significant due to the introduction of a £1mn cap on IHT relief for combined business and agricultural assets from April 2026.
This will be devastating in a sector where cost pressures are rising, and many families are feeling the strain.
One area where the chancellor has chosen to soften the blow slightly in terms of the tax take is its treatment of Aim portfolios.
Recognising the importance of investment in entrepreneurial and growing businesses, an investor’s Aim-listed shares will be liable for IHT at a rate of 20 per cent from April 2026, not at the standard rate of 40 per cent as feared. No changes were announced to gifting rules or pension tax relief either.
