By Charlotte Pritchard, Senior Associate – Private Client Department
If you own business or agricultural assets, or have pension wealth, major tax changes coming in April 2026 and 2027 could significantly affect your estate. These reforms will impact how much of your estate qualifies for relief; and how much could be taxed. Now is the time to take action.
What’s Changing?
From 6 April 2026, the way Agricultural Property Relief (APR) and Business Property Relief (BPR) work is changing. You’ll be entitled to 100% relief on up to £1 million of qualifying assets. Anything above that will only qualify for 50% relief. And unlike now, you won’t be able to transfer unused relief to your spouse; so how you own assets and how your Will is structured will matter more than ever.
If you’re considering gifting assets or using Discretionary Nil Rate Band (NRB) Trusts, doing so before April 2026 could help preserve reliefs. Trusts created before 30 October 2024 will also benefit from protected allowances, so timing is critical.
From 6 April 2027, unused pension funds will be brought into your estate for Inheritance Tax (IHT) purposes; unless they pass directly to your spouse or a charity. Even if your executors don’t control the pension, they could still be liable for the tax. This could push your estate over the £2 million threshold, reducing your eligibility for the Residence Nil Rate Band (RNRB).
To protect your estate, you may need to consider spousal bypass trusts, review your beneficiary nominations, and explore life cover held in trust. These strategies should be backed by specialist financial and tax advice to ensure they’re effective.
What You Should Do Now
You should urgently review your Will, any trusts you’ve set up, and how you own business or farm assets. It’s also important to work with your financial adviser to carry out a joint review of your pension and estate planning.
Make sure you have accurate valuations of relevant assets well ahead of April 2026. These will be essential for calculating reliefs and planning effectively.
Why Timing Matters
These aren’t minor tweaks; they are fundamental changes to how estates are taxed. Reviewing your planning now could help you preserve valuable reliefs, reduce your tax exposure, and ensure your estate passes as you intend.
If you haven’t looked at your estate planning recently, now is the time. Get in touch with McHale & Co to arrange a review and make sure your planning is ready for what’s ahead.
Speak to a member of the Private Client team on 0161 928 3848 or email us at mch@mchaleandco.co.uk
This article is for general information only and does not constitute legal or tax advice. Inheritance Tax laws, including APR and BPR, are subject to change, and the impact will vary depending on individual circumstances. You should always seek professional advice before making decisions about your estate or financial planning.
