Compliance
Compliance Tightening: UK’s Inheritance, Trusts & Employee Expense Reforms
Starting April 6, 2026, the UK introduces new rules on inheritance tax, trust exit charges, and changes to employer-provided employee reimbursement, tightening compliance.
By NomadicTax Research Team • 5-8 min read • April 18, 2026
## Key Compliance Changes Coming in April 2026
### Inheritance Tax (IHT) & Trusts
- From **Budget 2025**, the UK will close loopholes around trustees changing the situs (location) of trusts before exit charges apply.([gov.uk](https://www.gov.uk/government/publications/budget-2025-overview-of-tax-legislation-and-rates-ootlar/budget-2025-overview-of-tax-legislation-and-rates-ootlar?utm_source=openai))
- Trust exit charges, gifts to UK charities in lifetime, and gifts on death will follow new rules from **6 April 2026**.([gov.uk](https://www.gov.uk/government/publications/budget-2025-overview-of-tax-legislation-and-rates-ootlar/budget-2025-overview-of-tax-legislation-and-rates-ootlar?utm_source=openai))
- UK agricultural property owned by overseas non-long term residents will be treated more like domestic cases, even when held in offshore structures.([gov.uk](https://www.gov.uk/government/publications/budget-2025-overview-of-tax-legislation-and-rates-ootlar/budget-2025-overview-of-tax-legislation-and-rates-ootlar?utm_source=openai))
### Employee Benefits & Expenses
- Reimbursements for **eye tests**, **home working equipment**, and **flu vaccinations** will be exempt from Income Tax and National Insurance from 6 April 2026.([gov.uk](https://www.gov.uk/government/publications/budget-2025-overview-of-tax-legislation-and-rates-ootlar/budget-2025-overview-of-tax-legislation-and-rates-ootlar?utm_source=openai))
- At the same time, UK is removing the deduction for non-reimbursed home working expenses. Employers can still reimburse without causing a tax liability, but employees can’t deduct those costs.([gov.uk](https://www.gov.uk/government/publications/budget-2025-overview-of-tax-legislation-and-rates-ootlar/budget-2025-overview-of-tax-legislation-and-rates-ootlar?utm_source=openai))
- Payments for cancelled, moved, or curtailed shifts under Employment Rights Act will be taxed as regular income.([gov.uk](https://www.gov.uk/government/publications/budget-2025-overview-of-tax-legislation-and-rates-ootlar/budget-2025-overview-of-tax-legislation-and-rates-ootlar?utm_source=openai))
## Practical Compliance Tips for Businesses & Individuals
- **Review your trust structures** now, especially if assets are held offshore or you’re considering relocating trust jurisdiction. Take action before 6 April to avoid unwanted IHT outcomes.
- **Update employee benefits programs**: Make sure your expense reimbursement policies cover the newly exempt items; clearly document, and exclude non-eligible items.
- **Payroll adjustments** may be necessary to handle cancelled shift payments as taxable income; ensure PAYE/NI compliance.
- **Employee communications**: Inform staff about the changes — what’s now non-deductible, what remains covered, deadlines and thresholds.
## Example: Trusts & Employee Expense Impact
> A family trust held abroad shifts its situs just before the exit charge reform. Without compliant steps, it may face unexpected IHT on distributions after April 6, 2026. Meanwhile, a remote worker buying their own home office desk yet not using an employer reimbursement will no longer deduct that cost post-April 6.
## Actionable Checklist
- Audit any trust income/events planned around April 2026.
- Update expense policy handbooks.
- Train your finance and payroll teams.
- Consult a trust specialist if you’re a non-UK resident or have offshore assets.
*These compliance reforms are more than technical — they reshape tax risks for trusts, remote working, and the delivery of employee benefits.*