Inheritance Tax Changes: How to Protect Your Family’s Assets

The Autumn Budget announcements have brought inheritance tax (IHT) planning sharply into focus, with confirmed changes set to result in significantly higher IHT bills for many ordinary families in the coming years.

As these changes take effect, it’s essential to understand what they mean for your family’s assets — and to act before the window of opportunity narrows. The question many homeowners are asking is: will inheritance tax go up, and what practical steps can you take to protect your loved ones?

At MP Estate Planning, we’re here to guide you through these changes and help you make informed decisions to safeguard your family’s financial future. As Mike Pugh says: “Plan, don’t panic.”

Key Takeaways

• Understand the confirmed IHT changes from the Autumn Budget and what’s coming in 2026 and 2027.
• Learn how the nil rate band freeze — in place since 2009 and extended to at least April 2031 — is dragging more ordinary homeowners into the IHT net.
• Discover proven strategies including lifetime trusts, gifting, and life insurance in trust to reduce your family’s IHT exposure.
• Get specialist guidance on navigating IHT changes — because the law, like medicine, is broad, and you need a specialist.
• Take action now to secure your family’s financial future before these changes bite.

Understanding Inheritance Tax in the UK

The UK’s Inheritance Tax system catches more families every year, yet most people don’t understand how it works until it’s too late. Let’s break down the key components so you can see exactly where you stand.

What is Inheritance Tax?

Inheritance Tax (IHT) is a tax on the estate of someone who has passed away. It applies to everything the deceased owned — property, savings, investments, and possessions. The standard IHT rate is 40%, charged on the portion of the estate that exceeds the nil rate band (NRB) threshold.

To illustrate: if a single person’s estate is valued at £500,000 and they have a nil rate band of £325,000, the taxable amount is £175,000. At 40%, that means £70,000 is payable to HMRC before your family receives a penny. That’s money your family could have used for their mortgage, their children’s education, or simply their quality of life.

Key points to note about Inheritance Tax:

• The tax is levied on the estate’s value above the nil rate band threshold.
• The standard tax rate is 40% — reduced to 36% if you leave 10% or more of your net estate to charity.
• Certain allowances and exemptions can reduce the tax liability, but the nil rate band has been frozen at £325,000 since 2009 — that’s over 16 years without any increase.
• Transfers between spouses and civil partners are exempt from IHT, and any unused NRB can transfer to the surviving spouse (giving a married couple up to £650,000 combined).

Current Inheritance Tax Rates

The current nil rate band (NRB) stands at £325,000 per person — and it has been frozen at this level since 6 April 2009. The government has confirmed it will remain frozen until at least April 2031. That’s over two decades without any increase, while the average home in England has risen to around £290,000.

There’s also the Residence Nil Rate Band (RNRB), currently £175,000 per person, which applies when you leave your main residence to direct descendants — that means children, grandchildren, or step-children. It does not apply if you leave your home to nephews, nieces, siblings, friends, or charities. The RNRB is also frozen until April 2031 and tapers away by £1 for every £2 that your estate exceeds £2,000,000.

For a married couple who plan correctly, the combined maximum is £1,000,000 (£650,000 NRB + £350,000 RNRB). But for single homeowners, or those without direct descendants, the picture is much bleaker — just £325,000 before IHT kicks in.

Understanding these rates and thresholds is the foundation of effective estate planning. The frozen thresholds are the single biggest reason that ordinary homeowners — not just the wealthy — are now being caught by IHT. If you own a home in England worth around the national average, you could already be exposed.

As we continue to explore the topic of Inheritance Tax, we’ll examine the confirmed and upcoming changes and their implications, so you can take action rather than simply hope for the best.

Will Inheritance Tax Go Up in the Future?

In practical terms, Inheritance Tax is already going up — not necessarily through rate increases, but through the stealth effect of frozen thresholds combined with rising property values. And the Autumn Budget 2024 confirmed several additional changes that will expand the IHT net further.

Factors Influencing Tax Changes

Several factors are driving the expansion of IHT:

• Frozen thresholds since 2009: The nil rate band has been stuck at £325,000 for over 16 years. If it had risen with inflation, it would be significantly higher today. Every year it stays frozen, more estates get pulled into the taxable bracket.
• Rising property values: The average home in England is now worth around £290,000. For many homeowners, the family home alone uses up most or all of their nil rate band.
• Government revenue needs: IHT receipts have been rising year on year, and the government has shown no indication of increasing thresholds. The freeze is confirmed until at least April 2031.
• Policy changes targeting specific reliefs: The Autumn Budget 2024 announced caps on Business Property Relief and Agricultural Property Relief from April 2026, and the inclusion of inherited pensions within IHT from April 2027.

For instance, understanding these dynamics is essential for effective inheritance tax planning in Reading and across the country.

Government Statements on Tax Revisions

The Labour government used the Autumn Budget 2024 to announce multiple changes to the IHT regime. The key confirmed changes include:

• NRB and RNRB freeze extended to April 2031 — meaning thresholds won’t increase for at least another six years.
• From April 2026: Business Property Relief (BPR) and Agricultural Property Relief (APR) will be capped at 100% for the first £1 million of combined qualifying business and agricultural property, with only 50% relief available on any excess.
• From April 2027: Inherited pensions will be brought within the scope of IHT for the first time — a major change affecting families who had assumed their pension pots would pass tax-free.

These aren’t speculative possibilities — they are announced policy. The direction of travel is clear: the IHT net is widening, not narrowing.

The families who will be best protected are those who take action now, while current reliefs and planning opportunities still exist. By understanding the factors driving these changes and acting on them, you can position your family ahead of the curve rather than scrambling to react after the fact.

Potential Inheritance Tax Reforms

Understanding the future of inheritance tax requires a clear-eyed look at what has already been announced and what further changes may follow. The UK government has demonstrated a willingness to expand the reach of IHT, and there are strong indications that more reforms could be on the horizon.

The Current Political Landscape

The political landscape makes further IHT reform more likely, not less. IHT receipts have been climbing steadily — driven primarily by the frozen nil rate band and rising property values — and this revenue stream has become increasingly important to the Treasury.

The Autumn Budget 2024 confirmed that the government sees IHT as a legitimate tool for increasing revenue. The caps on BPR and APR from April 2026 and the inclusion of pensions in IHT from April 2027 represent the most significant changes to the IHT regime in years. And historically, once governments start expanding a tax, they rarely reverse course.

Potential further reforms that have been discussed by policy commentators include reducing or abolishing the Residence Nil Rate Band, extending the 7-year gifting period, and changing how trusts are taxed. None of these are confirmed, but the direction of travel makes proactive planning essential.

The Impact of Frozen Thresholds

The most significant “reform” to IHT hasn’t required any new legislation at all — it’s simply the decision to keep the nil rate band frozen at £325,000 since 2009. This is now confirmed to continue until at least April 2031, meaning the NRB will have been frozen for over 22 years.

To put this in perspective: in 2009, the average house price in England was around £160,000. Today it’s around £290,000. The nil rate band hasn’t moved a penny, but property values have nearly doubled. This is a stealth tax increase that has quietly pulled hundreds of thousands of ordinary homeowning families into the IHT net — families who would never have considered themselves “wealthy.”

Public Sentiment and Tax Policy Changes

Public sentiment on IHT is divided. Polls consistently show that most people believe IHT is unfair — it taxes money that has already been taxed during a person’s lifetime. Yet at the same time, there is political pressure to address wealth inequality, and IHT is often framed as a tool for doing so.

The reality for most families is simpler than the political debate suggests. Trusts are not just for the rich — they’re for the smart. England invented trust law over 800 years ago, and the legal tools to protect your family’s assets are well-established and entirely legitimate. The question isn’t whether you can protect your estate — it’s whether you’ll do so before the rules tighten further.

We recommend taking action based on the laws as they stand today, rather than waiting to see what happens. The families who plan early will always be in a stronger position than those who react late.

Strategies to Minimise Inheritance Tax Liability

To protect your family’s wealth from IHT, you need a clear strategy — not vague hopes. The good news is that English law provides several well-established, legitimate planning tools. The key is using the right combination for your circumstances.

Careful Estate Planning

Effective estate planning starts with understanding exactly what you own, how it’s held, and what your IHT exposure is. Many families don’t realise they have a problem until it’s too late — often because they haven’t considered that their home, pensions, life insurance (if not in trust), and savings all add up.

Lifetime gifting is one of the simplest tools available. You can give away £3,000 per tax year using your annual exemption, and if you didn’t use last year’s allowance, you can carry it forward for one year — meaning up to £6,000 in a single tax year. Beyond that, regular gifts from surplus income (money you don’t need for your living expenses) can be exempt from IHT immediately, with no 7-year waiting period — provided you document them properly.

But gifting has limitations. You can’t give away your home and keep living in it rent-free — HMRC calls this a “gift with reservation of benefit” and will treat the property as still in your estate. That’s where trusts become essential.

Making Use of Allowances and Exemptions

Utilising available allowances and exemptions is one of the most straightforward ways to reduce your IHT liability. Many people simply don’t use what they’re entitled to:

• Annual Exemption: £3,000 per tax year, with one year carry-forward if unused.
• Small Gifts Exemption: £250 per recipient per tax year — but you cannot combine this with the £3,000 annual exemption for the same person.
• Wedding and Civil Partnership Gifts: £5,000 from a parent, £2,500 from a grandparent, and £1,000 from anyone else.
• Normal Expenditure Out of Income: Regular gifts from your surplus income are immediately exempt — no 7-year rule — provided they form a regular pattern and don’t affect your standard of living. This is one of the most powerful and underused exemptions.
• Spouse/Civil Partner Exemption: Transfers between spouses and civil partners are completely exempt from IHT, with no limit.

The Role of Trusts in IHT Planning

Trusts are the most powerful tool available for IHT planning — and they have been for over 800 years. England invented trust law, and it remains one of the most sophisticated and effective legal arrangements in the world for protecting family assets.

A trust is a legal arrangement — not a legal entity — where trustees hold assets on behalf of beneficiaries. The settlor (the person who creates the trust) transfers assets into the trust, and from that point, the assets are legally owned by the trustees, not the settlor. This means the assets can fall outside the settlor’s estate for IHT purposes, provided the trust is properly structured and the settlor does not retain a benefit.

The most common type of trust used in estate planning is the discretionary trust, where the trustees have absolute discretion over how and when to distribute income and capital to the beneficiaries. No beneficiary has a right to demand anything — and that’s precisely what makes discretionary trusts so effective for protecting against care fees, divorce, and creditors. Discretionary trusts can last for up to 125 years under English law, providing multi-generational protection for the family.

At MP Estate Planning, our most popular products include the Family Home Protection Trust (Plus) (which protects your home from care fees while retaining IHT reliefs including the RNRB), the Gifted Property Trust (which removes 50% or more of your home’s value from your estate while avoiding gift with reservation rules and starting the 7-year clock), and Life Insurance Trusts (which ensure your life insurance payout avoids the 40% IHT charge — and these are typically free to set up).

Trust setup costs start from £850 for straightforward arrangements, typically ranging from £850 to £2,000 or more depending on complexity. When you compare that to the cost of care fees — currently averaging £1,200-£1,500 per week — a trust costs the equivalent of about one to two weeks of care. It’s a one-time cost versus an ongoing drain that can consume your entire estate down to the £14,250 lower capital threshold.

Changes That Could Impact Wealth Distribution

The combination of frozen thresholds and rising property values is fundamentally changing who pays IHT. This is no longer a tax that only affects the wealthy — it’s increasingly hitting ordinary homeowning families across England and Wales.

Thresholds and Tax Bands

The nil rate band stands at £325,000, and the Residence Nil Rate Band at £175,000. Both are frozen until at least April 2031. The NRB has been frozen since 2009 — if it had kept pace with inflation, it would be significantly higher today. Instead, more estates are being pulled into the IHT net every single year.

Here are the key points to understand about thresholds:

• The nil rate band has been frozen since 2009, and with the average home in England now worth around £290,000, a single person’s property alone can consume nearly all of their NRB — leaving their savings, investments, and other assets fully exposed to 40% tax.
• The Residence Nil Rate Band only applies if you leave your main residence to direct descendants (children, grandchildren, step-children). If you don’t have children, or you leave your home to siblings, nieces, nephews, or friends, you get no RNRB at all. It also tapers away for estates over £2,000,000.
• A married couple who plan correctly can shelter up to £1,000,000 combined (£650,000 NRB + £350,000 RNRB). But a single person without children is limited to just £325,000 before IHT applies.
• The freeze effectively means a real-terms reduction in the threshold every year — a stealth tax increase that requires no new legislation.

Impacts of Rising Property Values

Rising property values are the single biggest driver of increased IHT exposure for ordinary families. Consider the numbers:

1. A home worth £290,000 already uses up 89% of a single person’s nil rate band. Add savings, a car, personal possessions, and any life insurance not written in trust, and you’re almost certainly over the threshold.
2. For a married couple with a home worth £500,000 and other assets of £200,000, total estate value is £700,000. Even with the full NRB and RNRB (£1,000,000), they’re currently safe — but if property values continue to rise while thresholds remain frozen, that cushion disappears quickly.
3. In London and the South East, where average property values are significantly higher, many families are already well above the combined £1,000,000 threshold — and facing IHT bills of tens or even hundreds of thousands of pounds.

The lesson is straightforward: if you own property in England and you haven’t planned for IHT, you almost certainly should. The longer thresholds remain frozen while property values rise, the worse the problem gets. And once someone has passed away, it’s too late to plan — IHT must be paid before the Grant of Probate is issued and before beneficiaries can access the estate.

Importance of Specialist Advice

As IHT becomes an increasingly pressing concern for ordinary families, seeking the right professional advice has never been more important. But here’s the key point: not all advisers are the same. As Mike Pugh puts it: “The law — like medicine — is broad. You wouldn’t want your GP doing surgery.”

IHT planning sits at the intersection of trust law, tax law, property law, and family dynamics. You need a specialist — someone who works with trusts and IHT every day, not a general high-street solicitor who handles trusts occasionally. At MP Estate Planning, IHT and trust planning is all we do.

Choosing the Right Specialist

When selecting an adviser for IHT planning, look for the following:

• Specialism: Do they focus specifically on trusts, IHT, and estate planning? Or is it one of a dozen services they offer?
• Transparency on pricing: MP Estate Planning is the first and only company in the UK that actively publishes all prices on YouTube. If an adviser won’t tell you what their services cost upfront, that’s a red flag.
• Up-to-date knowledge: With the confirmed changes coming in April 2026 and April 2027, your adviser must understand the current landscape — not the rules as they were five years ago.
• Practical experience: How many trusts have they set up? Do they understand the practical aspects — Land Registry transfers, Trust Registration Service requirements, mortgage considerations?

How to Assess Your Estate’s IHT Exposure

Before you can plan, you need to know your starting position. Here’s how to assess your estate’s IHT exposure:

1. Add up everything you own: Property (current market value, not what you paid), savings, investments, vehicles, valuables, and the death benefit of any life insurance policies not written in trust.
2. Subtract what you owe: Mortgages, loans, and other debts reduce your estate’s value for IHT purposes.
3. Identify your available reliefs: NRB (£325,000), RNRB (£175,000 if qualifying), spouse exemption, BPR/APR if applicable.
4. Calculate the gap: If your estate exceeds your available reliefs, the excess is taxed at 40%. That’s your IHT exposure.

MP Estate Planning offers a comprehensive 13-point threat analysis using our proprietary Estate Pro AI software, which identifies not just IHT exposure but also risks from care fees, probate delays, sideways disinheritance, divorce, and more.

Gifting as a Strategy

Gifting assets during your lifetime is one of the most straightforward ways to reduce your estate’s IHT exposure. But it needs to be done properly, with a clear understanding of the rules — particularly the 7-year rule and the gift with reservation of benefit rules.

Annual Gift Allowances

The UK provides several IHT exemptions for lifetime gifts. These are available every tax year and should be used proactively as part of your planning:

Gifts beyond these exemptions become Potentially Exempt Transfers (PETs) when made to individuals. If you survive for 7 years after making a PET, it falls completely outside your estate. If you die within 7 years, the gift uses up your nil rate band first, and any excess is taxed at 40% — though taper relief can reduce the tax (not the gift’s value) on gifts made between 3 and 7 years before death. Importantly, taper relief only applies when the cumulative value of gifts exceeds the £325,000 nil rate band.

It’s worth noting that transfers into discretionary trusts are not PETs — they are Chargeable Lifetime Transfers (CLTs), which are subject to an immediate charge of 20% on any value exceeding the available nil rate band. For most families transferring their home into a trust, if the value is within the NRB, there is no entry charge at all.

Potential Risks of Gifting Assets

While gifting is a valuable tool, it comes with important risks and limitations that you must understand:

• The 7-year risk: If you die within 7 years of making a gift to an individual, it may be brought back into your estate for IHT purposes. There’s no way to guarantee you’ll survive 7 years, which is why gifting alone is rarely sufficient as a complete IHT strategy.
• Gift with reservation of benefit (GROB): If you give away an asset but continue to benefit from it — such as gifting your home to your children but continuing to live in it rent-free — HMRC will treat the asset as still in your estate, even if you survive 7 years. This is one of the most common mistakes people make when attempting DIY estate planning. There is also a related charge called the Pre-Owned Assets Tax (POAT) that can apply as an annual income tax charge if you benefit from a formerly-owned asset in circumstances where the GROB rules don’t apply.
• Loss of control: Once you gift an asset outright, it belongs to the recipient. If they divorce, face bankruptcy, or simply decide to sell, you have no say in the matter. With the UK divorce rate at around 42%, this is a real and common risk. This is why placing assets into a discretionary trust — rather than gifting outright — often provides better protection. As Mike Pugh puts it: “What house? I don’t own a house.”
• Capital Gains Tax: Gifting certain assets (such as a second property or investments) can trigger an immediate Capital Gains Tax liability on the person making the gift. Your main residence is normally exempt under Principal Private Residence relief. However, when transferring assets into or out of certain trusts, holdover relief may be available, meaning no immediate CGT charge arises.

Gifting works best as part of a broader estate plan, not as a standalone strategy. For most families, combining targeted gifting with a properly structured lifetime trust provides the strongest protection.

The Role of Life Insurance

Life insurance is one of the most overlooked tools in IHT planning — and one of the most effective, provided it’s set up correctly. The critical detail that most people miss is whether the policy is written in trust.

Aiding in Estate Planning

A life insurance policy can provide the liquidity your family needs to pay an IHT bill without having to sell the family home or other assets. This is particularly important because IHT must typically be paid to HMRC within 6 months of death (with some exceptions for property, which can be paid in instalments over 10 years) — and the Grant of Probate won’t be issued until HMRC is satisfied that IHT is either paid or arrangements are in place.

The key is that the life insurance policy must be written in trust. If a policy is not in trust, the payout forms part of your estate and is subject to 40% IHT — meaning up to 40% of the payout goes straight to HMRC rather than to your family. When written in trust, the payout falls outside your estate entirely, bypasses probate delays, and goes directly to the trustees for distribution to your beneficiaries.

At MP Estate Planning, we set up Life Insurance Trusts — and they’re typically free to set up. Given that this simple step can save your family tens of thousands of pounds in IHT, it’s one of the easiest wins in estate planning.

Addressing Common Misconceptions

There are several misconceptions about life insurance and IHT that need correcting:

• “Life insurance payouts are tax-free.” Not automatically. If the policy is not written in trust, the payout forms part of your estate and is subject to IHT at 40% on any amount above your available nil rate band.
• “I don’t need life insurance because my estate isn’t that large.” With the NRB frozen at £325,000 and the average English home worth around £290,000, many families are closer to the IHT threshold than they think. A life insurance policy in trust ensures there’s cash available to cover any IHT liability, funeral costs, and other expenses — without your family having to sell assets during a difficult time.
• “Writing a policy in trust is complicated and expensive.” It isn’t. A Life Insurance Trust is a straightforward legal arrangement that we set up regularly — often at no cost to the client.

If you have an existing life insurance policy that is not written in trust, it’s worth reviewing this as a matter of urgency. It could be the single simplest step you take to reduce your family’s IHT bill.

Charitable Donations and Inheritance Tax

Charitable giving is not only a way to support causes you care about — it can also provide meaningful IHT savings. Donations to registered charities are always fully exempt from Inheritance Tax, and there’s an additional incentive if you leave a significant proportion of your estate to charity.

As inheritance tax changes continue to widen the IHT net, charitable giving has become an increasingly important component of estate planning for many families. By incorporating charitable legacies into your will or trust structure, you can achieve a dual benefit: supporting causes that matter to you while reducing the tax burden on your family.

Reducing Your Tax Burden

The most valuable incentive is the reduced rate of IHT. If you leave at least 10% of your “baseline amount” (broadly, your net estate after deducting reliefs, exemptions, and the nil rate band) to charity, the rate of IHT on the remaining taxable estate drops from 40% to 36%. This 4% reduction can result in significant savings — and in some cases, the family actually receives more after the charitable gift than they would have without it, because the lower rate more than compensates for the amount given to charity.

Key benefits of charitable donations in reducing IHT include:

• Charitable legacies are completely exempt from IHT — every pound given to charity is a pound that isn’t taxed.
• Leaving 10% or more of your net estate to charity reduces the IHT rate from 40% to 36% on the remaining taxable estate.
• Charitable giving through your will or trust can be structured to maximise the benefit to both the charity and your family.

Benefits of Leaving a Legacy

Beyond the tax benefits, leaving a charitable legacy allows you to make a lasting contribution to causes you believe in. Many of our clients find that incorporating charitable giving into their estate plan provides a sense of purpose and fulfilment — knowing that their wealth will support both their family and the wider community.

Thoughtful estate planning doesn’t have to be a choice between your family and charity. With the right structure, you can support both — and the inheritance tax changes we’re seeing make this kind of planning more relevant than ever.

Planning for Business Owners

For business owners, IHT planning carries additional complexity — and from April 2026, additional urgency. The confirmed changes to Business Property Relief mean that business owners who have been relying on BPR to shelter their business assets from IHT need to review their plans now.

Business Assets and Inheritance Tax

Business Property Relief (BPR) has historically been one of the most valuable IHT reliefs, providing either 100% or 50% relief on qualifying business assets depending on the type of interest held. Qualifying assets include shares in unquoted trading companies, interests in sole trader or partnership businesses, and certain business-related property.

From 6 April 2026, the rules are changing significantly: BPR (and Agricultural Property Relief) will be capped at 100% relief on the first £1 million of combined qualifying business and agricultural property. Any qualifying property above that £1 million threshold will only receive 50% relief — meaning the other 50% of the value will be subject to IHT at 40%, resulting in an effective rate of 20% on the excess.

For business owners whose qualifying assets exceed £1 million, this change could result in substantial IHT liabilities that didn’t exist under the previous rules. Planning now — while the current, more generous rules are still in place — is essential.

Options for Business Succession Planning

Effective succession planning for business owners should consider several strategies:

• Gifting shares during your lifetime: Transfers of qualifying business property to individuals are PETs and fall outside your estate after 7 years. If BPR applies at the time of the gift, no IHT is payable even if you die within 7 years (provided the recipient still holds qualifying property at the date of death).
• Using trusts to hold business assets: A Settlor Excluded Asset Protection Trust can hold investment or business property outside your estate. The trust structure provides flexibility for future distribution while offering protection from IHT, care fees, and family disputes.
• Life insurance in trust: A whole-of-life policy written in trust can provide liquidity to cover any IHT liability on business assets, ensuring the business doesn’t need to be sold to pay the tax bill.
• Shareholder agreements and cross-option agreements: These ensure a smooth transfer of business interests on death, preventing disputes and protecting the business’s continuity.

Business succession planning requires specialist advice. The interaction between BPR, CGT holdover relief, trust taxation, and the new rules coming in April 2026 means there are significant planning opportunities — but also significant pitfalls for those who get it wrong.

Inheritance Tax and Non-Domiciles

The IHT rules for non-domiciled individuals are undergoing their most significant change in decades. From 6 April 2025, the old concept of “deemed domicile” for IHT purposes has been replaced by a new residence-based test, and the implications for non-doms with UK ties are substantial.

Under the new rules, IHT will apply to an individual’s worldwide assets if they have been resident in the UK for 10 out of the last 20 tax years. This is a fundamental shift from the previous regime, where non-doms were only subject to IHT on their UK-situated assets unless they had been resident for 15 out of 20 years.

Tax Rules for Non-Domiciled Individuals

The key changes affecting non-doms include:

• 10-year threshold: Once you’ve been UK-resident for 10 out of the last 20 tax years, your worldwide estate is within the scope of UK IHT — including overseas property, bank accounts, and investments.
• “Tail provision”: Even after leaving the UK, you remain within the scope of IHT for a further period (up to 10 years after departure, depending on how long you were UK-resident). This means simply leaving the country doesn’t provide an immediate exit from UK IHT.
• Existing excluded property trusts: The government has confirmed that assets settled into excluded property trusts before the new rules take effect will retain their excluded property status. However, any new additions to such trusts after the transition date will not benefit from this protection.

For more detail on the evolving landscape, you can review the latest analysis of IHT reforms for UK non-doms.

Planning Strategies for Non-Doms

Non-doms who are approaching or have passed the 10-year threshold should consider the following:

• Reviewing global asset structure: Understanding which assets are now within the scope of UK IHT is the essential first step. Professional advice is critical here, as the interaction between UK IHT and overseas tax regimes can be complex.
• Trust planning: Lifetime trusts established before the new rules took effect may offer continued protection for overseas assets. However, the rules are highly technical, and specialist advice is essential to ensure compliance.
• Double taxation agreements: The UK has IHT treaties with a limited number of countries. Where a treaty exists, it may provide relief from double taxation — but these treaties vary significantly in scope.
• Residence planning: For those with flexibility, managing UK residence days can be relevant — but this must be done carefully and with proper advice, not as a last-minute reaction.

For broader guidance on inheritance tax planning, our resources provide valuable insights into effective strategies for both UK-domiciled and non-domiciled individuals.

The message for non-doms is clear: the old planning assumptions no longer hold. Professional advice is not optional — it’s essential.

Conclusion: Preparing for IHT Changes

The IHT landscape is shifting, and the changes are real and confirmed — not speculative. Frozen thresholds, new caps on business and agricultural relief, pensions being brought into the IHT net, and the new rules for non-doms all point in the same direction: more families will pay more tax, unless they plan.

Regular Reviews of Your Estate Plan

An estate plan isn’t something you set up once and forget about. Your circumstances change — property values rise, family situations evolve, and the law is updated. We recommend reviewing your estate plan at least every 3 to 5 years, and immediately after any major life event (marriage, divorce, birth of grandchildren, receipt of an inheritance) or significant legal change like the ones announced in the Autumn Budget.

If you don’t yet have a plan in place, the time to act is now — not when a care need arises, not when a family member is diagnosed with a serious illness, and certainly not after someone has passed away. As Mike Pugh says: “Not losing the family money provides the greatest peace of mind above all else.”

Staying Informed on Policy Changes

Staying informed about IHT policy changes gives you the ability to act before new rules take effect, rather than scrambling to react afterwards. The confirmed changes coming in April 2026 (BPR/APR caps) and April 2027 (pensions in IHT) give you a clear window to plan — but that window won’t stay open forever.

At MP Estate Planning, we keep our clients informed about every relevant development. If you’re concerned about how the inheritance tax changes could affect your family, we’re here to help you understand your position and take the right steps to protect what you’ve worked a lifetime to build. Keeping families wealthy strengthens the country as a whole — and it starts with a plan.