Wealth planning is becoming a key factor in property investment decisions and more people are recognising that acting early provides greater flexibility and better wealth preservation. As awareness of wealth protection strategies grows, more landlords may be setting up property businesses sooner rather than later to maximise the benefits. In this article we will review how to implement strategic wealth management, including gifting shares in a property company, trusts, family investment companies, and taking out insurance policies.
The Labour government announced multiple changes to Inheritance Tax in last year’s Autumn Budget, including the fact that from 6 April 2027, unused pension funds and death benefits will be subject to Inheritance Tax (IHT). Since then, 80% of lawyers have reported a surge in IHT enquiries, according to research released in February by The Association of Lifetime Lawyers. The research also found that 66% of lawyers believe many people are unaware of their options for IHT planning.
Inheritance Tax is a tax payable on the value of a deceased person’s estate. It is currently charged at 40% on the value of an estate above their tax-free allowance, the Nil Rate Band of £325,000. There is also a Residential Nil Rate Band of £175,000 if you leave your home to direct descendants, bringing the total tax-free allowance to £500,000 per person.
In April 2025, changes primarily focus on the rules for non-UK domiciled individuals and the continued freeze on IHT thresholds. Currently, non-doms are only liable for IHT on UK-situated assets, while foreign assets are generally exempt unless they’ve been a UK resident for 15 out of the past 20 years (introduced in 2017). The new rule, effective from the 6 April 2025, will mean that IHT will apply to an individual’s worldwide assets if they have been resident in the UK for 10 out of the last 20 tax years, down from 15 years previously.
The government has confirmed that the nil-rate band (£325,000) and residence nil-rate band (£175,000) will remain frozen until at least 2030. With inflation and rising property values, this freeze means more estates will fall into the IHT net over time. Effectively, this change increases the tax burden without raising rates.
From 6 April 2026, Agricultural Property Relief will face dramatic restrictions. Currently, farmland and related buildings can qualify for 100% relief from IHT. The new rules will cap this relief at £1m per estate. Any excess will be taxed at 20% (half the standard IHT rate). This change targets larger estates and could impact farming families significantly.
