After months of speculation, the Chancellor has now set out the Governments tax and spending plans within the ‘Budget’ on 26^th November 2025. As is often the case, rumours of potential property tax rises and changes to lifetime gifting rules gave rise to a significant number of clients progressing forward with planned property sales and family transfers prior to the budget date. It is always a discussion being had – ‘will the budget make a difference’, and when deals are already ongoing, many are not willing to take the risk and push for a pre-budget deadline!

For Inheritance Tax, there has been a very slight concession to the Governments position on the proposed changes to Agricultural Property Relief (APR) and Business Property Relief (BPR), with the 1 million pound tax free allowance now being transferable between spouses. Thankfully, it appears that the rumoured changes to lifetime gifting rules have not been included, with many fearing an extension to the existing 7 year time period for gifts, or the capping of gifts.

We have seen the introduction of a new Mansion Tax, being a High Value Council Tax Surcharge on properties worth over £2,000,000. This will be an annual surcharge above and on top of council tax, taking effect from April 2028 and will be based upon updated valuations. There will be four price bands with the tax rising for each band: £2,000,000 – £2,500,000 = £2,500, £2,500,000 – £3,500,000 = £3,500, £3,500,000 – £5,000,000 = £5,000 and £5,000,000 plus = £7,500. The surcharge will be paid to central rather than local government.

Business owners are now likely to experience additional staff costs with The Chancellor announcing an increase to the minimum wage for workers over 21. This increase sits at 4.1% on the national living or minimum wage, resulting in the minimum wage of £12.21 per hour increasing to £12.71. The minimum wage for all 18 – 20-year-olds will also increase by 8.5% from £10.00 per hour to £10.85 per hour.  This is likely to impact those agricultural clients with several additional staff and particularly those who include diversified businesses.

Landlords are going to experience an increase in tax with the government introducing new income tax rates for property that are 2% higher than the existing rates, resulting in the property tax rate being 22%, property higher rate being 42% and the property additional rate being 47%. These new property income rates will apply from 6^th April 2027 in England and Wales. As a result, the income tax system will be come more complex for people with multiple income sources and individuals with property income will pay additional tax based on the rates above.

Overall, the Budget announcements do not come as a major surprise and the only solace is the fact that there has not been further detrimental changes to Inheritance Tax positions for the farming community in relation to gifting and transferring assets. As always, it is recommended that full professional advice is taken when assessing business decisions and in the current changing times such as these, it is always advised to sit down and assess your position and how best to plan and move forward.