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)
- Trust exit charges, gifts to UK charities in lifetime, and gifts on death will follow new rules from 6 April 2026.(gov.uk)
- 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)
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)
- 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)
- Payments for cancelled, moved, or curtailed shifts under Employment Rights Act will be taxed as regular income.(gov.uk)
Practical Compliance Tips for Businesses & Individuals
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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.
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Update employee benefits programs: Make sure your expense reimbursement policies cover the newly exempt items; clearly document, and exclude non-eligible items.
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Payroll adjustments may be necessary to handle cancelled shift payments as taxable income; ensure PAYE/NI compliance.
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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.