Inheritance Tax (IHT) can be complex, especially in light of shifting policy announcements and the planned 2027 reforms affecting the treatment of unused pension savings.
While recent revisions to the forthcoming changes to Agricultural Property Relief (APR) and Business Relief (BR) will be welcome for many, they do not remove the need for careful succession and estate planning – especially as many asset values continue to rise. Reliefs should not be taken for granted, and families and business owners are encouraged to review their plans well ahead of the April 2026 changes.
Effective planning can help protect family assets and safeguard wealth for the future. As everyone’s circumstances are different, seeking professional advice ensures that the most appropriate reliefs are used and potential IHT liabilities are minimised.
Changes to reliefs
Agricultural Property Relief and Business Relief
Inheritance Tax rules have remained largely unchanged for several years. The November Budget 2025 confirmed that the nil-rate band will remain frozen at £325,000 until 2031, and the seven-year rule for lifetime gifts continues to apply.
By contrast, APR and BR have seen notable changes over the past year. Reforms announced in the Autumn Budget 2024 introduced a £1 million cap on assets qualifying for 100% relief. Following industry concern, these measures were subsequently revised by the government in late 2025.
From 6 April 2026, the threshold for 100% APR and BR will increase from £1 million to £2.5 million per estate.
This means:
- Individuals will be able to pass on up to £2.5 million of qualifying agricultural or business assets with full inheritance tax relief;
- 50% relief will continue to apply to qualifying assets above this threshold; and
- These reliefs are available in addition to existing inheritance tax allowances, such as the nil-rate band and residence nil-rate band.
Unused pension funds and death benefits
From 6 April 2027, most unused pension funds and pension death benefits will be included within a person’s estate for IHT purposes. Personal Representatives will be responsible for reporting and paying any IHT due on these amounts. This represents a significant change in how pensions are treated for estate planning.
As a result, estates containing inheritable pension wealth may face higher IHT liabilities from April 2027.
How M+A Partners can help
Tax laws are subject to change and it is helpful to keep informed with the current regulations and IHT planning possibilities.
Do contact us if you wish to discuss your Inheritance Tax exposure as well as ways to reduce this, where possible, by lifetime planning. Also, ensuring your will does not jeopardise valuable tax reliefs, such as the residence nil-rate band.
To find out more about how we can help with your unique Inheritance Tax position, get in touch with your usual M+A Partners’ contact or with the team at north.norfolk@mapartners.co.uk, or call 01263 513971.
