The Chancellor’s Spring Statement provided no further update on contentious inheritance tax (IHT) reforms or including the proposed inclusion of pension pots in estates from 2027.
The lack of clarity comes despite significant pushback on measures first announced in October’s Budget, particularly the cap on exemptions for business assets and agricultural land from 2026.
The impending changes have sparked concern among family business owners and farmers, who fear increased complexity and larger tax bills when passing assets to the next generation. With the tax-free bands frozen, more estates have already been dragged into the IHT net, a trend set to accelerate under the proposed rules. According to new projections from the Office for Budget Responsibility (OBR), IHT revenue is expected to reach approximately £67 billion between 2024/25 and 2029/30 – £2.5 billion more than anticipated in the Autumn Budget. Clara Staunton, Partner, Wills, Trust and Probate, Myerson Solicitors, said:
“The Spring Statement brought no new surprises on business and capital taxes but also no further clarity on the implementation of inheritance tax changes. For clients undertaking estate and succession planning, including those with business and agricultural interests, the lack of further clarity around inheritance tax (IHT) means a number of key planning questions remain unanswered. You will recall that the autumn budget announced amendments to the rules on pensions, bringing unused pension pots into an estate for IHT purposes from April 2027, along with restrictions to Business Property Relief and Agricultural Property Relief coming in April 2026. The changes will affect a wide range of clients and the lack of further detail on how the rules will be implemented is frustrating. Thoughtful, proactive planning remains the most effective way to prepare for future reform and ensure long-term protection for assets and business interests.”
Speculation has also been mounting about potential changes to ISAs to encourage investment over saving. Rob Morgan, Chief Investment Analyst at Charles Stanley, said:
“Treasury documents released after the Spring Statement confirmed it is investigating reforms to “strike the right balance” between cash and equities to earn “better returns for savers, boost the culture of retail investment and support the growth mission”.
This implies the cash ISA limit could be cut in future. Under current rules, savers and investors can split their £20,000 ISA allowance across the different ISA types, primarily Cash and Stocks and Shares ISAs, as they see fit.
Elsewhere it was confirmed that ISA limits will remain at current levels up to and including the 2029/30 tax year. This provides some certainty, though the overall limit of £20,000 has now been in place since 2017 since which time earnings and the cost of living are much higher. If the allowance had been uprated by inflation since it went up to £20,000 it would be over £26,000 by now, which means today’s savers and investors are more restricted in building a tax efficient pot.”
Rachael Griffin, tax and financial planning expert at Quilter said that it’s encouraging to see the Treasury taking a serious look at ISA reform. She added:
“ISAs are long overdue some careful thought to ensure they are both simple and produce the right behaviours. There’s a real opportunity here to simplify the system and better align it with Labour’s objectives. Making stocks and shares ISAs more attractive than their cash counterpart could help more people grow their wealth over the long term and direct more capital toward productive investment, which is clearly a goal for this government. Many Britons hold excessive cash generating low returns, rather than investing in growth assets that could better secure their financial future and help the UK economy.”
A modernised approach to development spending was also outlined, aiming to ensure value for UK taxpayers while delivering mutual benefits both domestically and internationally. Under the new framework, aid budgets for the Spending Review period will be based on Gross National Income forecasts from the Spring Statement 2025, with a gradual reduction to 0.3% by 2027. Ian Jeffery, CEO of Law Society of England and Wales commented:
“Although the Spring Statement didn’t deliver cuts, it didn’t deliver a proper investment plan in our justice system either. A fair and effective justice system requires greater funding and bold decisions.
The upcoming spending review needs to provide more funding and resources to fix the courts system, boost legal aid and protect our communities.
The industrial strategy will be a key opportunity to unleash the legal sector. In an increasingly uncertain world, as the Chancellor rightly said, legal services can provide a bedrock of stability on which sustainable and resilient growth can be built.”
