With upcoming changes to inheritance tax (IHT) on the horizon, failing to review your estate planning now could mean that your beneficiaries receive far less than you intended.

What’s Changing?

In the latest Budget, the government announced significant changes to IHT, including:

• Nil-rate band freeze – The tax-free allowance remains at £325,000 until at least 2030, meaning more estates will be subject to IHT as property and asset values rise.
• Pension funds included in IHT – From April 2027, pension savings will no longer be automatically exempt from IHT, potentially increasing the tax burden on your estate.
• Changes to Business and Agricultural Property Relief – From April 2026, these reliefs will be capped at £1 million, which could result in larger tax bills for family-run businesses and farms.
• Changes to Non-Domiciled (Non-Dom) IHT Rules – From April 2025, the current 15-year rule allowing non-domiciled individuals to avoid IHT on overseas assets will be replaced with a residence-based system. This means individuals who have lived in the UK for more than 10 years will be taxed on their worldwide assets, making estate planning even more crucial for those affected.

What This Means for You

If you haven’t reviewed your will and estate planning recently, your existing arrangements may no longer be as tax-efficient as they once were. The new rules could mean that more of your estate is subject to IHT, leaving your loved ones with less than you had planned.

Steps You Can Take

To ensure that your family benefits as much as possible from your estate, consider taking the following steps:

1. Review Your Will – Make sure it reflects your current wishes and takes into account the new tax rules.
2. Consider Lifetime Gifting – Passing on assets during your lifetime can help reduce your taxable estate.
3. Update Pension Beneficiary Nominations – With pension funds now falling under IHT, alternative strategies may be needed.
4. Seek Professional Advice – Speaking with a solicitor can help you explore trusts, reliefs, and other strategies to minimise IHT liability.

Don’t Leave It Too Late

The upcoming changes to IHT could significantly impact the amount your loved ones receive from your estate. Proactive planning now can help to preserve your wealth and reduce unnecessary tax burdens.

At Switalskis, our experienced Wills and Probate team can guide you through these changes and help you put the right measures in place to protect your estate.

Contact us today to arrange a consultation and ensure that your loved ones receive what you intend.