Putting in place well thought out plans to provide for your loved ones when you are no longer here can provide peace of mind for you and your dependants.

You will want to make sure that your wealth is passed on to the right people, with maximum ease and minimal Inheritance Tax (IHT) liability.

However, upcoming changes to IHT could disrupt your carefully laid plans – so a review of your estate plan is essential.

Here is what you need to know about the upcoming IHT changes and what you need to do to protect your estate.

Business Property Relief

If your estate includes business property, changes to the tax liability on such property might be affected.

The Autumn Budget introduced significant changes to Business Property Relief (BPR) under IHT, effective from April 2026.

BPR is a valuable relief that can reduce the value of a qualifying business property by either 50 per cent or 100 per cent under the current rules.

This decreased value applies to both lifetime gifts and transfers on death, and can significantly reduce your IHT liability.

However, under the new rules, 100 per cent tax relief on business assets will be capped at £1 million per individual, with relief 50 per cent thereafter.

This means your Executors and beneficiaries will be liable to pay a higher rate of IHT upon your death.

Whether or not you run your business with your family, the provision you make in your Will can have a major influence on future decision-making.

Our distinctive perspective means we are able to advise on wider considerations, including structuring the business and navigating the potential tension between emotional bonds and commercial demands.

Our team can help you think through the options and understand the implications for management, providing effective incentives and managing your exposure to tax.

Pensions

While many pension pots currently fall outside of IHT calculations, from April 2027 the Government plans to include pensions within the scope of IHT.

This change, combined with the freeze on IHT thresholds until 2030, means that more estates will likely exceed the £325,000 IHT threshold.

In light of these changes, you may want to consider making an expression of wish form if you do not have one already.

An expression of wish form is a document that directs your pension provider on who should receive your pension benefits when you pass away.

Reviewing and potentially updating this form will make certain that your pension aligns with your current wishes.

For example, leaving your pension to a spouse can help reduce the IHT burden on your estate, as assets passed to a spouse are generally exempt from IHT.

Reviewing your Will

With the upcoming changes in IHT, it is growing increasingly important to give consideration to tax planning when making a Will.

It is essential to prepare a Will now if you have not already done so.

If you have an existing Will, then it might be time to review it and make amends to mitigate the impact of IHT changes.

We can assist you in reviewing your Will periodically and following major life events such as marriages, divorces and birth of children to ensure that it reflects your current wishes.

Ways to reduce IHT

There are several ways in which you can prepare your Will and estate plan to minimise IHT liabilities.

For example, you can potentially save tens of thousands of pounds by leaving your main home to a direct descendent.

You can also secure significant tax reductions through charitable donations.

A flexible Will, such as one that includes a discretionary trust, allows you to adapt your asset distribution based on future changes in tax laws, making it a potentially favourable option.

With a discretionary trust, your estate can allocate assets to beneficiaries at the trustee’s discretion, which can help manage how and when assets are distributed, potentially reducing IHT liabilities.

This structure offers a flexible approach, allowing trustees to make decisions that align with both your intentions and current tax laws, providing peace of mind that your assets are protected even as laws change.

Additionally, you may want to review your lifetime gifting strategy.

Making gifts can reduce the IHT burden on your estate.

However, gifts must be made seven years prior to your death to be exempt from IHT, so early planning is vital.

Gifts must comply with current laws, including those related to taxes and ownership transfers.

For instance, transferring real estate as a gift requires proper registration in accordance with property laws to ensure that the transfer is recognised legally.

Legally documenting each gift’s details including its date, value, and recipient is a safeguard against potential future legal disputes.

For example, you need to be clear about the terms of the gift to avoid the creation of an implied trust.

If the donor appears to retain some control over the gifted asset, it may not qualify as a gift for legal or tax purposes and could lead to disputes or unintended tax consequences.

Our knowledge of tax planning and our clients’ financial arrangements means we are well positioned to advise on making tax-efficient bequests.

Secure your legacy with careful estate planning

The preservation of wealth and protection of assets requires careful, focused planning. This often involves the use of Trusts as a shelter for family capital and should be considered as part of your overall tax planning strategy.

At Rotherham Taylor, we provide a discreet estate planning service that covers trust planning and administration, review of Wills, IHT planning schemes, and arrangement of life assurance to cover potential tax liabilities.

We can help you understand which reliefs might apply to your estate and ensure you are making the most of these opportunities.

For tailored advice on what IHT changes mean for your estate, get in touch with our expert accountants today.