With the Autumn Budget looming on 26th November 2025, now might be a good time to have a review of your financial affairs and potential inheritance tax (IHT) exposure to see what planning can be done in preparation for any further changes to the IHT rules.
The 2024 Autumn Budget already brought most pension savings within the scope of IHT from 6 April 2027 and made some significant changes to Agricultural Property Relief (APR) and Business Property Relief (BPR) from 6 April 2026. It is rumoured that there are even more IHT changes on the horizon for the next budget. IHT is already at a record high, with July 2025 figures being £844 million, which is 13% higher than last July. It appears that the government may not be stopping there.
What are the rumours?
- A cap on lifetime gifts or extending the 7-year survivorship rule to 10 years
- Abolishing Taper Relief regarding lifetime gifts (see next slide)
- Abolishing IHT gifting out of excess income exemption
This is how Taper Relief currently works for lifetime gifts.
| How long ago was the gift made? | Rate of tax on the gift | How much is the tax reduced? |
| 0-3 years | 40% | No reduction |
| 3-4 years | 32% | 20% reduction |
| 4-5 years | 24% | 40% reduction |
| 5-6 years | 16% | 60% reduction |
| 6-7 years | 8% | 80% reduction |
| 7+ years | 0% | No tax to pay |
What should you do?
- If you are contemplating making lifetime gifts, consider doing these before the Autumn Budget and keep good records!
- Review your wills with a solicitor.
- Review your pensions with a financial adviser.
- Revisit your financial and estate planning strategies.
- Consider the use of trusts for IHT planning.
Other issues:
- The new taxation of pensions complicates the reporting requirements on death, as Personal Representatives of the estate are responsible for reporting and paying the tax, but they may not be in charge of the pension. This could cause administrative issues for the Personal Representatives.
- Any changes to the lifetime gifting rules will also be the responsible of Personal Representatives in an estate to report. It is important that they understand what is required and seek legal advice to support them in this role. Keeping good gifting records will help your Personal Representative in your estate.
- We are awaiting further guidance from HMRC for Personal Representatives which will hopefully clarify the administrative process so that Personal Representatives can understand what is required of them.
If this article has prompted you to think about wills, trusts and inheritance tax planning, get in touch with our Tax, Trusts and Succession team by clicking here.
