Overview

• Financial advisers report that the Chancellor could restrict or scrap the inheritance tax exemption for regular gifts from surplus income in the Autumn Budget.
• The rule currently allows unlimited, regular gifts from income that do not reduce the donor’s standard of living, and such gifts fall outside IHT immediately.
• Affluent grandparents often use the exemption to fund private school fees, with advisers warning of a potential “double blow” if changes coincide with VAT on fees.
• The Budget has been set for November 26, and advisers say gift-allowance restrictions are among options reportedly being explored to raise revenue.
• IHT receipts are about 6.9% higher year-on-year so far, while separate changes are scheduled to dilute business and agricultural reliefs next April and to include unspent pensions in estates from April 2027.