As announced at the 2024 Autumn Budget, a new £1m allowance will apply to the combined value of property that qualifies for 100% business property relief or agricultural property relief from inheritance tax. The value of the estate exceeding the allowance will be subject to relief at a lower rate of 50%. A consultation has now been launched which outlines how the £1m allowance will operate in respect of both existing trusts and trusts yet to be formed. As with any major change to the tax rules involving trusts, the transition is complicated, and the consultation asks whether the rules on application are sufficiently clear, as well as requesting views on other matters. Have your say here by 23 April 2025.

The consultation also revealed key information for individuals - it is confirmed that the £1m allowance refreshes every seven years (as the nil rate band does), and transfers made prior to 30 October 2024 (Budget Day) will not use up any of the £1m allowance.