The 26 November 2025 Autumn Budget introduced a number of tax and regulatory changes — some quite technical — but several are highly relevant for clients’ estate planning, wills and lasting power of attorney (LPA) strategies. For anyone with assets, a private pension, property or a business, now is a good moment to review their estate plans.

Key Tax & Inheritance-Related Changes (and Why They Matter)

Frozen IHT thresholds — and what that means

• The main nil‑rate band (NRB) remains at £325,000 per person.
• The residence nil‑rate band (RNRB) remains at £175,000 per person (for a residence passed to direct descendants).
• The freeze on these thresholds is extended until at least 5 April 2031.

Implication: With house price inflation and rising asset values, more estates are likely to breach these thresholds — meaning more families may face IHT unless they proactively plan.

Changes to Business & Agricultural Property Relief (BPR / APR)

• From 6 April 2026, the 100% relief on qualifying business or agricultural property will be limited by a combined cap of £1 million per individual until April 2031.
• Importantly for married couples or civil partners: this £1 million allowance will be transferable between them, which is good news.

Implication: For clients with family businesses, farms or other qualifying property, this change reduces the value that can be passed on tax-free. The transferability between spouses provides some flexibility — but families should review holdings and may consider gifting or restructuring strategies sooner rather than later.

Pension Funds & Death Benefits to Count in IHT from 2027

• From 6 April 2027, most unused pension funds and death benefits from registered pension schemes will be included in an individual’s estate for IHT purposes.
• Personal representatives (i.e., executors) will be responsible for reporting and paying any IHT due on these pension assets.
• PR’s will now be able to direct pension scheme administrators to withhold 50% of taxable benefits for u p to 15 months and pay IHT in certain circumstances. PR’s will be discharged from a liability for payment of IHT on pensions discovered after they have received clearance from HRMC.

Implication: Previously, many pension pots sat outside IHT calculations — but that’s changing. Clients who expect to pass on substantial pension wealth should update their wills and LPAs accordingly, and perhaps consider making lifetime gifts, or using other tax-efficient vehicles.

Other headlines;

• Infected blood compensation payments are relieved from IHT where the original infected/affected person eligible for compensation has died before the compensation is paid
• More efforts to be made by the government to prevent IHT avoidance through loopholes such as ensuring UK agricultural property held via non-UK entities is treated as UK sited. Also, addressing changes in status of trust assets before an exit charge and restricting charity exemptions to direct gifts to UK charities and clubs.
• Government will introduce a cap of £5m on relevant property trust charges for pre-30 October 2024 excluded property trusts. The value of such trusts would need to be significant to be affected.

What Didn’t Change — but Still Matters

While some feared radical overhauls, the Budget leaves several core pillars unchanged — meaning existing estate-planning strategies may remain valid, but some of them need updating in light of the new pension/IHT and relief-cap rules.

What This Means for Advisers and Clients

• Re-evaluate estate plans now: Given the freeze on IHT thresholds and increased likelihood of IHT liability, take the opportunity with clients to review their wills — and to consider lifetime gifting or other structuring.
• Factor in pensions as part of the estate: Clients with substantial pension pots should be made aware that those assets will soon be included for IHT.
• Review business/farm succession plans: For clients who own agricultural or business property, the new £1 million cap on reliefs demands early review — it may no longer be sufficient to rely on APR/BPR alone.
• Spousal transferability offers a planning window: With the new relief transfer between spouses/civil partners, there may be strategies (e.g. via trust or lifetime transfer) to optimise estate value between first and second deaths.
• Advise regular reviews: Given the pace of change, planning should not be “set and forget” — regular reviews (especially after major life events) will now be more important than ever.

Final Thoughts — A Time for Proactive Planning

The 2025 Budget may not have revolutionised the UK tax system — but for professional advisers it reinforces that the status quo is shifting subtly but significantly. The freeze on thresholds, relief-caps, and the new treatment of pensions all point to a future where more estates will be subject to IHT.

For clients, that means now is the time to act: review wills, update LPAs, re-assess pension-planning strategies, and consider whether lifetime gifting or restructuring assets makes sense.