How are the inheritance tax rules changing?

The chancellor also announced a number of changes to the way IHT works.

At the moment, inherited pensions are not counted for inheritance tax purposes, but will be included from April 2027.

The rules are also changing on combined business and agricultural assets, such as farms.

There will continue to be no IHT due on such assets worth less than £1m, but from April 2026, those worth more than that will be taxed at an effective rate of 20%.

Under the current rules, small family farms – including land used for crops or rearing animals, as well as farm buildings, cottages and houses – have been handed down through the generations without attracting IHT.

Reeves also said shares listed on the AIM stock exchange in estates would be taxed at 20%.