You will have been living on a desert island not to know that Chancellor Rachel Reeves has been struggling to balance the nation’s books.
In her 31st October Budget 2024, she made a £9 billion allowance for unforeseeable surprises – otherwise called “headroom” ; a tiny amount when matched against annual forecasts of UK Government spending and income . Unfortunately for our Labour Government, this “headroom” has already been gobbled up. Inflation is now in excess of 3% – making the cost of Government borrowing more expensive: various trades unions are already requesting eye watering pay increases: there is a stooshie between Angela Rayner and Rachel Reeves on how best to fill the gap between income & expenditure ( Ms Rayner wants to levy higher taxes – see note 1 below - and Rachel Reeves wants to cut benefits rather than increase taxes again): and lastly, there is of course the unforeseeable – come in, Donald Trump and his spitefully infantile tariffs!
Over the next month or so, I will remind you of the key proposed changes – and exemptions - to Inheritance Tax (IHT) from 6th April 2026, Capital Gains Tax , Employers’ National Insurance and what is coming down the line on Pensions. ( In short, from 6th April 2027, Pension savings will no longer be exempt for IHT.)
Because they have sparked such a huge backlash from farmers, particularly smaller family farmers , I will start with Inheritance Tax . To be continued…