Caroline's article was published in WealthBriefing, 19 August 2025, and can be seen here.
Caroline Foulger, Partner in our Private Client department, outlines the significant changes to UK Inheritance Tax (IHT) coming into effect from April 2027. These include the inclusion of unused pension funds within the scope of IHT and the continued freezing of thresholds until 2030.
As a result, more estates particularly those of average families will be subject to IHT, with estimates suggesting a rise from 4.6% to 6% of estates affected, and an additional £1.7 billion in tax revenue annually. Caroline warns that many individuals may not consider themselves wealthy, yet their estates could still be liable due to the value of pensions and property.
The article emphasises the urgency of early and strategic estate planning. Caroline highlights that traditional pension-based mitigation strategies may lose effectiveness, and alternative tools such as gifting, loan trusts, life insurance, and discretionary trusts may become increasingly important. She also notes the potential need to revisit ownership structures for family businesses and to consider using the residence nil rate band on first death, especially if it may not be available later. These strategies require time to implement and benefit from long-term growth and exemptions.
Caroline concludes by stressing that estate planning should not compromise future lifestyle or care needs. The upcoming changes offer an opportunity for families to engage in broader conversations about wealth, legacy, and financial security. By planning early, families can create flexible strategies that adapt to changing circumstances and ensure that their intentions are clearly understood and achievable.
Read the full article on the WealthBriefing website [external link].
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
