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Stay Ahead of Changing Inheritance Tax Rules
Recent Reforms & Planning Ahead
Inheritance Tax is constantly evolving. Recent announcements have confirmed major changes to reliefs and allowances over the coming years. UK Property Accountants (UKPA) monitors these developments and adapts your estate plan to keep you one step ahead. Here’s what’s coming and how to prepare.
Cap on Business & Agricultural Property Relief (April 2026)
From 6 April 2026, the current 100 percent relief available for Business Property Relief (BPR) and Agricultural Property Relief (APR) will be restricted. The government has confirmed a combined £2.5 million allowance for assets qualifying for 100 percent relief. Once this allowance is used, any remaining qualifying value will attract 50 percent relief instead. The allowance applies across both BPR and APR and is not transferable between spouses or civil partners.
What to Do Now
Pensions Included in Estates (April 2027)
From 6 April 2027, most unused pension funds and pension death benefits will be brought within the value of the estate for inheritance tax purposes. Personal representatives, rather than scheme administrators, will be responsible for reporting and paying any inheritance tax that becomes due. Certain benefits, including death-in-service payments and some defined benefit payments, will continue to fall outside the estate. The change applies to deaths occurring on or after 6 April 2027.
What to Do Now
Freeze of Nil‑Rate Bands (Until April 2028)
The nil-rate band (£325,000) and residence nil-rate band (£175,000) are now frozen until at least 5 April 2030. The £2 million taper threshold for the residence nil-rate band is also fixed for the same period. As property and investment values rise, more estates will exceed these thresholds and fall within the scope of inheritance tax.
What to Do Now
Other Potential Reforms
From 6 April 2025, liability for inheritance tax on foreign assets will depend on periods of UK residence rather than common-law domicile status. Beyond this, policy discussions continue around possible caps on lifetime gifting, changes to the seven-year rule and taper relief and wider structural reform. These further changes are not yet legislated, so estate plans should remain flexible.
Frequently Asked Questions
From April 2027, most unused defined contribution pension funds and death benefits will be included in the estate. Death‑in‑service benefits and certain defined benefit pensions remain excluded.
Current legislation freezes the NRB (£325,000) and RNRB (£175,000) until at least 5 April 2030. Any changes would require new legislation. Regular reviews ensure your plan remains aligned with the latest rules.
Strategies include making gifts, using trusts, investing in assets qualifying for Business or Agricultural Property Relief (within the new cap), reviewing pension drawdown options and optimising the use of your nil‑rate bands and RNRB. A bespoke plan from UKPA will balance tax savings with personal objectives.
Act Now to Secure Your Family’s Future!
Upcoming changes to inheritance tax reliefs and allowances could significantly increase your estate’s tax exposure. By acting now, you can mitigate the impact. Contact us for a personalised review and futureproof your estate plan.
Why UKPA Is Your Trusted Partner for Future Planning
Strategic agility
We create flexible estate plans that can be adapted as rules change. Our modelling tools show how proposed reforms could affect your estate.
Holistic advice
We integrate business relief, pension planning, nil‑rate band optimisation, trusts and gifting into one coherent strategy.
Clear communication
You receive straightforward explanations of how reforms affect you and what options are available.
What our clients say about us
Testimonials
Rendering the best service with a team of qualified and regulated accountants and tax advisers.
Our Process
How We Work
Our work is centred around efficiency, collaboration, and delivering exceptional results to our clients.
Initial Discovery Call
We start with a straightforward process. Answer a few simple questions to help us understand your circumstances. It’s hassle-free, quick and designed to save you time.
Data Gathering and Analysis
Once we have the details, our team of experienced accountants gets to work. You can trust us to manage the complexities and ensure everything is accurate and compliant.
Thorough Review & Timely Submission
We conduct a meticulous review to ensure accuracy, compliance, and completeness in every submission. Our streamlined process guarantees timely submissions, so you never miss a deadline.
Ongoing Support
Our commitment extends beyond accounting and tax advisory work. We provide ongoing support, including tax planning and addressing accounting queries throughout the year.
UK Property Accountants is a leading firm of chartered certified accountants and chartered tax advisers specialising in the property and real estate sector with head office in Central London.
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