Upcoming changes to inheritance tax (IHT) rules mean that individuals and families should review their estate planning strategies to ensure they remain tax-efficient.
The latest budget confirmed that the IHT nil rate band and residence nil rate band thresholds will remain frozen until 2030. As property values continue to rise, more estates will be impacted by IHT. Additionally, changes to tax relief on certain assets and adjustments to pension rules could result in more estates facing unexpected tax liabilities.
Adam Scott, partner at Trethowans highlights that many individuals may be unaware of the steps they can take to mitigate IHT exposure and ensure their wealth is passed on efficiently.
Recent research from The Association of Lifetime Lawyers, a membership body of specialist lawyers across the UK, highlights a growing concern around IHT. Their findings show that 80% of their lawyers have seen a significant rise in IHT-related enquiries over the past six months, with 68% reporting a further increase following the latest budget announcement.
More than three-quarters (77%) of legal professionals observed a growing trend of clients looking to gift assets during their lifetime to reduce the IHT bill their loved ones might have to pay. Despite this rising demand, 66% of lawyers believe many people remain unaware of their options for IHT planning.
Adam comments:
“The landscape of inheritance tax is evolving, leaving many individuals unsure about how to best safeguard their assets. We’ve seen an increase in interest in property gifting, as well as concerns over pension access and the potential impact on long-term financial security. Taking proactive steps today can help minimise tax liabilities and provide peace of mind for the future.”
Adam also highlights a key change coming into effect from April 2027:
“From 2027, most unused pension pots and lump sum death benefits will be included as part of a person’s estate for IHT purposes. This change could push many estates over the IHT threshold, meaning more individuals may face unexpected tax bills. Reviewing your will and estate planning strategy now can help ensure your financial and legal affairs remain as tax-efficient as possible.”
Seeking professional advice from a specialist solicitor can provide peace of mind and confidence in navigating these complex changes.
To discuss estate and wealth planning, contact Adam today on 0800 2800 421.
Disclaimer
This information is intended for general informational purposes only and does not constitute legal advice. We recommend seeking professional advice before taking any action on the information provided. If you would like to discuss your specific circumstances, please feel free to contact us on 0800 2800 421.
