Should you be reviewing your Inheritance Tax Planning now?
With the 2025 Autumn Budget fast approaching, speculation is mounting about potential changes to the UK’s Inheritance Tax (IHT) regime.
While earlier discussions had centred on ISA reform, the focus now appears to be shifting firmly towards IHT — a tax that has long divided opinion among both taxpayers and policymakers.
At RPGCC, our Private Client Tax team is already speaking to clients about how possible changes might impact their estates, wealth transfer strategies, and long-term family financial planning. The question we are hearing most often is: Should I be reviewing my Inheritance Tax planning now?
What is the current position on Inheritance Tax?
At present, UK taxpayers can pass on certain assets free of Inheritance Tax if they survive for more than seven years after making the gift. This so-called “seven-year rule” is a cornerstone of current IHT planning, enabling families to transfer wealth across generations without an immediate tax charge.
However, there is growing speculation that Chancellor Rachel Reeves may be considering a tightening of this relief — potentially extending the time period, introducing caps on lifetime gifting, or altering the taper relief rules. Any such change would represent yet another challenge for UK taxpayers who are already navigating frozen thresholds and rising asset values.
Why Inheritance Tax? Why is Inheritance Tax under the Chancellor’s microscope?
Inheritance Tax is often described as one of the UK’s most controversial taxes. Despite affecting a relatively small percentage of estates, its impact has been steadily increasing. In just five years, the UK’s annual IHT receipts have risen from £4.65 billion to £8.25 billion. This surge has been driven largely by two factors:
- The nil rate band and residence nil rate band have remained frozen.
- Asset values — particularly property — have continued to rise year-on-year.
Data released by HMRC on 31 July 2025 for the 2022/23 tax year shows that only 4.62% of deaths in the UK resulted in any Inheritance Tax being paid, a modest 0.23% increase on the year before. Yet, with upcoming changes to Agricultural Property Relief (APR) and Business Property Relief (BPR) scheduled for 2026, more estates are expected to be pulled into the IHT net.
IHT, possible change ahead
Industry commentary suggests the Chancellor could:
- Introduce a cap on the total value that can be gifted tax-free during a lifetime.
- Extend the seven-year rule to a longer period.
- Replace the current gifting system with a lifetime IHT allowance, as seen in other jurisdictions.
Adam Thompson, Private Client Tax Partner at RPGCC, added
“I’m not at all surprised that IHT is on the Chancellor’s agenda. The Government has pledged not to raise taxes on ‘working people’, and this could be a way to raise revenue without breaking that promise. The current IHT system is complex — even small tweaks could raise significant revenue while helping the Chancellor close fiscal gaps.”
Adam added “the Government’s logic may be that if an individual can afford to make large lifetime gifts without affecting their standard of living, they can also afford to contribute more in tax”.
IHT and the broader economic implications
Changes to Inheritance Tax could have knock-on effects beyond the individuals directly impacted. For example:
- Smaller inheritances could reduce the number of property purchases funded by inherited wealth.
- Reduced cashflow in the economy might slow growth in certain sectors.
Furthermore, from 2027, unused pension pots are set to be brought further into the IHT net — another reason why the tax take is expected to rise even if no immediate changes are made in 2025.
How can RPGCC’s Private Client Tax Team help?
For many individuals and families, Inheritance Tax planning is not just about reducing the eventual tax bill — it’s about protecting wealth for future generations and ensuring that the transfer of assets aligns with their personal values and financial goals.
At RPGCC, our Private Client Tax specialists:
- Review your current IHT exposure and identify opportunities for tax-efficient structuring.
- Analyse the potential impact of legislative changes and help you adapt your plans accordingly.
- Advise on gifting strategies, trust structures, and the use of reliefs such as APR and BPR.
- Work alongside your legal advisers to ensure your estate planning is cohesive, compliant, and effective.
Given the uncertainty surrounding the Autumn Budget, now is an ideal time to revisit your Inheritance Tax planning. Acting early can allow you to make the most of the current rules before any changes come into force.
Adam added “the debate around Inheritance Tax is unlikely to fade away anytime soon, and the upcoming Autumn Budget could bring significant shift. With more estates expected to be drawn into the IHT net in the coming years, proactive planning is certainly essential. The team here at RPGCC, are committed to guiding our clients through this evolving landscape — ensuring that their plans are not only tax-efficient but also aligned with our clients’ long-term objectives.
If you would like to discuss your own IHT position and explore tailored planning strategies, our Private Client Tax team is here to help. Contact us on 020 7870 9050 or at hello@rpgcc.co.uk where a member of our team is waiting to help.
