Inheritance Tax Update
🚨 Inheritance Tax is quietly pulling more families into the net.
New analysis shows that if IHT thresholds had kept pace with inflation, families could have had an extra £270,000 tax-free allowance by the 2027/28 tax year.
📊 Instead of today’s frozen limits:
• £325,000 nil rate band could have been £537,000
• £175,000 residence nil rate band could have been £233,000
That’s a combined potential allowance of £770,000 before inheritance tax applies.
But thresholds are frozen until 2030 — while house prices and asset values continue to rise.
Even more significant: from April 2027, unused pension funds are expected to be included in estates for IHT purposes, adding further pressure on families and estate planning strategies.
Government figures now predict that:
➡️ 7% of estates could face IHT by 2032/33
⬆️ Up from just 4% in 2020/21
The message is clear: inheritance tax planning is no longer just for the ultra-wealthy.
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