For most of the last fifteen years, inheritance tax planning could wait. That is no longer true. A frozen threshold, a narrowing set of reliefs, and a major change to how pensions are treated are quietly pulling more families into a tax many assumed would never apply to them.

The nil-rate band, the amount that passes free of inheritance tax, has stood at £325,000 since 2009. Add the residence nil-rate band of £175,000 where a main home passes to direct descendants, and an individual can pass on up to £500,000, or up to £1 million for a married couple. The figures sound generous. The problem is that they have not moved while property and investment values have. Each year the freeze pulls more estates over the line, not because those families are meaningfully wealthier, but because the threshold has stood still.

Two changes sharpen the picture. From April 2026, the relief that allowed many family businesses and farms to pass almost untouched has been capped, with full relief now limited to a set allowance and only partial relief above it. From April 2027, the bigger shift arrives: most unused pension pots will fall within the estate for inheritance tax for the first time. For decades the standard advice was to spend other assets first and leave the pension untouched, because it passed outside the estate. That logic ends, and anyone holding a significant pension should be reviewing their position now rather than in 2027.

None of this removes the levers available, but it does reward using them early. Lifetime gifts fall outside the estate if you survive seven years from the date of the gift, so timing matters. Trusts and family investment companies can hold wealth in a structure designed around the family. Life cover written in trust can meet a future tax bill, so the estate is not forced to sell to pay it. Leaving at least a tenth of an estate to charity reduces the rate on the rest. And on a second death, the unused allowances of the first have to be actively claimed, something missed more often than it should be.

The common thread is that the most valuable inheritance tax planning is the kind done in good time, not at the last minute. Our role is to see the whole estate, model where the exposure sits, and coordinate the legal and tax work so the pieces fit together. What has taken decades to build should not be diminished by what could have been planned for.

Disclaimer: This article is general information, not advice. Tax treatment depends on individual circumstances and the rules may change. Figures correct as at June 2026.