A quiet 2026 Budget for Private Wealth? The important reforms still to come

FORTHCOMING CHANGES – Pensions and Inheritance Tax

The most significant change remains the inclusion of most unused pension funds in an individual’s estate for IHT purposes from 6 April 2027. This fundamentally changes the long-standing strategy of preserving pension wealth to pass down generations tax efficiently.

Actions to consider
– Review the value of your pension alongside the rest of your estate to understand the potential inheritance tax implications from April 2027.
– Consider whether gifting, trust planning or other estate planning arrangements could help mitigate future tax exposure.

IMPACT – Frozen tax thresholds mean more families are exposed to IHT

The nil-rate band (£325,000) and residence nil-rate band remain frozen until 2031. Frozen tax thresholds continue to pull more families into the IHT net as property and investment values rise.

Actions to consider
– Check your estate’s potential IHT exposure in light of rising asset values.
– Look at making full use of available gifting allowances and exemptions.

ACTION – Reviewing your estate plan before the 2027 pension changes

What worked well as an estate planning approach in the past may need revisiting before the 2027 changes take effect.

Actions to consider
– Revisit your Will and pension beneficiary nominations to ensure they still reflect your wishes.
– Assess whether your current estate plan remains tax efficient in light of the 2027 pension changes.

CONSIDER – Succession planning for business owners and farming families

With potential changes to key inheritance tax reliefs, now is the time for business owners and farming families to review succession plans and the future transfer of assets to the next generation.

Actions to consider
– Review your succession plans and ownership structures.
– Evaluate the impact of Business Property Relief (BPR) and Agricultural Property Relief (APR) changes.