Overview

• Officials are weighing a lifetime cap on tax-free gifts to help cover an estimated £40–50 billion shortfall ahead of the autumn Budget.
• Other options under review include tightening or removing taper relief on gifts made three to seven years before death and reviewing capital gains tax rates.
• These potential reforms build on last year’s Budget move to bring unused defined-contribution pensions into the inheritance tax base from April 2027 and on frozen IHT thresholds.
• Treasury sources stress that these measures remain at an early option-development stage and that no senior-level policy decisions have been taken.
• Opponents warn the changes could prompt accelerated gifting or pension withdrawals, add complexity to probate and still fall short of the revenue targets.