Reeves takes an extra £2bn in inheritance tax - for now

Inheritance tax (IHT) is an odd one; many worry about it but only a tiny minority ever end up paying it. After this Budget, the minority will grow and the bills they face will rise.

- JAMES MOORE

While the changes will make a relatively small (£2bn) contribution to filling the £22bn black hole chancellor Rachel Reeves identified in the public finances, every little helps.

This most unpopular of levies is currently paid at 40 per cent above a threshold of £325,000, which will be kept in place until 2030. Transfers to a spouse are exempt.

Where it gets more complicated is the complex array of reliefs available on assets such as land, business property, certain types of shares, pension savings, and so on. All of these can significantly cut the bills to beneficiaries of sizeable estates. It is these reliefs the chancellor has decided to target, and not without justification.

The amount of IHT paid varies wildly depending on the type of asset being left. Estates with a heavy component of agricultural land or business property currently pay very little. On the other hand, if you have a sizeable stock portfolio, the chancellor will take a big bite out of it (although smart tax planning can cut the bill).