While this Spring Statement maintained many of the changes announced in last year’s Autumn Budget rather than introducing significant new measures, there are several important developments to consider.
Inheritance Tax planning remains critical
The Office for Budget Responsibility has upgraded its Inheritance Tax (IHT) forecasts, predicting that IHT will now raise £66.89 billion between 2024/25 and 2029/30 – an additional £2.44 billion compared to previous estimates. With approximately 9.7% of estates expected to incur IHT by 2029-30.[1] The previously announced caps on Agricultural Relief and Business Relief (coming in April 2026) remain in place.
We’ve been speaking to clients about their estate planning since the changes were first announced in the Autumn Budget, and these conversations are continuing as the April 2026 changes draw closer. If you hold business or agricultural assets, now is a good time to review your estate planning strategy and consider what action may be needed.
ISA reforms on the horizon
While no immediate changes were announced, the Chancellor confirmed that the Government is “looking at options for reforms to Individual Savings Accounts that get the balance right between cash and equities”. This suggests potential future restrictions on cash ISA contributions to encourage more investment in stocks and shares.
If you’re currently maximising your cash ISA allowance, we’d recommend reviewing whether a more balanced approach between cash and investments could better support your long-term financial goals. Of course, every individual’s circumstances are different, so seeking personalised advice is key to making the right decisions.
Capital Gains Tax considerations
With CGT rates having increased last autumn (basic rate now 18%, higher rate 24%) and the tax-free allowance reduced to just £3,000, tax-efficient investment planning is more important than ever. For business owners, the Business Asset Disposal Relief rate will increase from 10% to 14% in April 2025.
We can help you explore strategies to mitigate these increased tax burdens, including utilising your full ISA and pension allowances.
Pensions
There were no updates in the Spring Statement regarding the previously proposed changes to bring pensions within the scope of Inheritance Tax from April 2027. The consultation period remains active, and while no firm legislation has been confirmed, the direction of travel appears unchanged.
We are continuing to have conversations with clients about how best to prepare for the potential 2027 changes. While we’re not urging any rushed decisions, there are planning opportunities worth considering in advance.
Your Mattioli Woods consultant will be discussing these with you over the coming year as part of your ongoing planning.
Tax-efficient investment opportunities
With increasing tax pressures across multiple fronts, tax-efficient investment vehicles are becoming more valuable than ever. Venture Capital Trusts (VCTs), Enterprise Investment Scheme (EIS) investments, and strategic gifting can provide significant tax advantages while supporting your broader financial goals. Advice is always recommended, so if this applies to you, your consultant is on hand to help.
We can help you explore comprehensive tax planning strategies, including VCTs for income tax relief and tax-free dividends, gifting strategies to reduce Inheritance Tax exposure, and other tax-efficient investment approaches tailored to your specific circumstances. Our expertise extends beyond conventional planning to ensure all available tax reliefs and allowances are optimally utilised.
Next steps
If any of the developments covered raise questions or concerns about your own planning, we’re here to support you. Your Mattioli Woods consultant will be happy to discuss how these changes may impact your personal circumstances and ensure your financial strategy remains appropriate and up to date.
Content correct at time of writing (March 2025).
Important information: The value of investments and the income from them can go down as well as up and you may not get back the amount invested. This communication is for information purposes only and does not constitute financial advice. Tax treatment depends on individual circumstances and may be subject to change in the future. Mattioli Woods Limited is authorised and regulated by the Financial Conduct Authority.
