How financial planners and solicitors can help clients stay efficient during the upcoming Inheritance Tax reforms

A major concern for many clients is ensuring their beneficiaries will be supported by the legacy they leave behind.

While estate planning has always been a key consideration for clients, it’s become even more important in recent years as Inheritance Tax (IHT) receipts continue to climb.

According to Statista, IHT revenue has reached record highs for four consecutive years. In 2024/25 alone, they reached £8.25 billion, and projections suggest the figure will climb again next year. The following years are also likely to see rising receipts, as reforms due in 2026 and 2027 will widen the scope of IHT even further.

So, with IHT revenue already at historic levels and set to rise, many clients may want to reassess their estate plans now to ensure their wealth is passed on efficiently and in line with their intentions.

Read on to find out about the upcoming reforms and how our sectors can coordinate to help clients prepare for them.

2026 will see reforms to Business Relief and Agricultural Relief

Business Relief (BR) and Agricultural Relief (AR) help reduce the taxable value of qualifying assets passed on after death.

Under the current rules, individuals can claim up to 100% BR on qualifying assets they held for at least two years and owned at the time of their death. Similarly, up to 100% AR is available on farmland if the owner has either lived on and farmed the land for at least two years or owned the land for at least seven years while it was farmed by someone else.

There is currently no limit on the value of assets you can claim BR or AR on. However, from April 2026, the rules are set to change.

Individuals will have a £1 million combined allowance for assets qualifying for 100% BR and 100% AR. Any value above this threshold will receive 50% relief instead of 100%.

Additionally, shares in “unlisted companies” will no longer qualify for 100% relief and will instead be eligible for 50% relief.

This could mean that clients with significant wealth held in qualifying assets may want to reassess their holdings and ensure their estate plans remain as tax efficient as possible under the new rules.

Pensions will be liable for Inheritance Tax from 2027

Alongside the changes to AR and BR, pensions are also set to fall within the scope of IHT from April 2027. This marks a major shift, and government estimates suggest that nearly 50,000 estates will be affected.

While only some of your clients will hold assets that qualify for BR or AR, all will likely have pension savings, and many may have increased their contributions specifically to improve the efficiency of their estate.

Bringing pensions into the IHT net could expose a much larger share of clients’ wealth to taxation. It may also cause some estates to lose access to the residence nil-rate band, which tapers once the net value exceeds £2 million.

Many of your clients may have already started to prepare for this change, but it’s important that they do so with professional assistance to ensure they remain compliant and maximally efficient.

Solicitors and financial planners can help clients keep their estates efficient as reforms approach

With the upcoming changes set to increase liabilities for many estates, it’s a good idea for clients to review their estate plans now in preparation.

Financial planners and solicitors can each play a key role in this process, and close collaboration between the two professions can help ensure clients’ strategies remain fully aligned.

How financial planners can help

Financial planners can support clients by reviewing their assets to identify any that may lose full BR or AR eligibility after April 2026 and ensure they make full use of all available allowances.

Furthermore, planners can help integrate pensions and other investments into clients’ wider estate plans, making sure that beneficiaries are correctly nominated and all tax implications are understood.

Planners can also explore alternative strategies – such as gifting or using trusts – to improve overall efficiency, and model different scenarios to show how the upcoming reforms could affect the size of the estate and its potential IHT liability.

How solicitors can help

Solicitors can assist clients by updating their wills to ensure allowances are fully optimised and their intentions are clearly expressed.

They can review trust arrangements to make sure they remain solid under the new rules, while ensuring that any changes to the estate plan stay fully compliant with the reforms.

By working together, our sectors can help clients mitigate IHT, stay ahead of changes, and coordinate their plan to ensure it’s both efficient and compliant.

Get in touch

To find out more about how our sectors can work together for the benefit of our mutual clients, get in touch.

Email info@fbwealth.co.uk or call us on 0333 1122211

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

All information is correct at the time of writing and is subject to change in the future.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The Financial Conduct Authority does not regulate estate planning, cashflow planning, tax planning, trusts, or will writing.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.