The Treasury is reportedly reviewing Inheritance Tax (IHT) as ministers look for ways to raise additional revenue.
While the Chancellor is considering multiple options, IHT reform appears to be a likely path, making this an ideal time to reassess and restructure your assets to minimise potential future IHT liabilities.
What changes could be coming to Inheritance Tax?
No decisions have yet been finalised, but a number of serious proposals are already circulating.
The most concrete change announced so far is that unused pension pots will be included in the IHT net from April 2027.
This single adjustment will bring many more estates within scope and has already influenced planning strategies.
Gifting, which has long been a common method to reduce IHT exposure, is also under scrutiny.
Policymakers are reportedly considering restrictions or adjustments to the tapering rules currently applied to gifts made within seven years of death.
Under the current rules, gifts made within this period are taxed at a tapered rate, while those made earlier are generally ignored.
The current rates are:
It is widely believed that these rules could be revised in the Autumn Budget, although nothing has been confirmed at this stage.
How can I reduce my Inheritance Tax exposure?
With uncertainty looming, the first step is to assess the size of your estate to understand what may be liable for IHT.
For pensions, consider how the 2027 changes could impact your tax position and whether drawing income or adjusting death benefits fits your long-term plan.
Next, review your gifting strategies.
While lifetime gifts remain a valuable tool, their effectiveness will depend on any new measures the Chancellor introduces.
Whatever decisions are made, our team is ready to help you review, restructure, and protect your assets to remain as tax-efficient as possible.
To ensure your estate planning gives you the maximum control and minimises liabilities, speak to us today for tailored Inheritance Tax advice.
