The Government has now issued the widely anticipated draft tax legislation following the Budget announcements last October, affecting inheritance tax.
What does this mean?
The legislation confirms that the significant changes to inheritance tax for business owners and farmers will come into force from 6 April 2026, as expected. It also brings pensions within the scope of inheritance tax from 6 April 2027.
In short, anyone with qualifying business assets (trading businesses) and farming assets, with a combined value of over £1m, could be paying more inheritance tax from 6 April 2026 due to a restriction on the reliefs currently available on these assets.
In addition, from 6 April 2027, pensions will be brought within the scope of inheritance tax. These changes, taken together, could mean a significant increase in potential future tax liabilities.
How can we support you?
If you think these changes could affect you, you should seek professional advice to ascertain the financial impact and to find out what planning opportunities are available to mitigate the tax.
Here at BHP, we have a large and highly experienced tax team that can advise on this and other tax matters. We are also independent financial advisors, allowing us to discuss your pension and potential planning options with you.
If you are concerned, please don’t hesitate to get in touch. There are still many ways to reduce the inheritance tax burden, and we’re here to help.
We will be holding an in-person event, which will also be live-streamed, to review the changes and discuss potential planning opportunities in September. If you would like to receive an invitation, please send your details here
