Tax Planning
Smart Tax Planning with Inheritance Tax Changes from April 2026
Major reforms to Agricultural Property Relief and Business Property Relief, and inheritance tax treatment of pensions and death benefits, kick in from 6 April 2026–get ahead with planning tips.
By NomadicTax Research Team • 5-8 min read • April 14, 2026
## Overview of Key Inheritance Tax Reforms
From **6 April 2026**, significant reforms to *Agricultural Property Relief* (APR) and *Business Property Relief* (BPR) will reshape inheritance tax planning in the UK. The reforms introduce a **£1 million threshold** for the full 100% relief rate, with values above that taxed at 50%. These changes target the wealthiest estates while protecting most family farms and small businesses. ([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))
Also from **6 April 2027**, unused pension funds and death benefits will be brought into the estate for inheritance tax purposes. This restores rules prior to 2015, closing planning gaps that used pensions to bypass IHT. ([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))
## Planning Strategies to Consider
- **Evaluate estate value ahead of thresholds.** If your business or agricultural assets exceed the £1 million threshold, consider distributing or restructuring ownership before April 2026 to maximize relief. For example, spouses could allocate qualifying assets to use separate relief allowances.
- **Pension planning.** Since unused pension funds will be taxable in the estate from April 2027, review your pension estate strategies. Ensuring beneficiaries are set, using drawdown options, or spending pension funds may reduce IHT exposure.
- **Use spouse transfers wisely.** The Budget introduced the ability to transfer unused APR/BPR relief between spouses or civil partners, like existing nil-rate band rules. Efficient estate planning can help allocate relief to where it’s most impactful. ([assets.publishing.service.gov.uk](https://assets.publishing.service.gov.uk/media/69283abea245b0985f0341b7/Budget_2025_Policy_Costings.pdf?utm_source=openai))
## Practical Examples
- **Farm family with £1.5m in agricultural land:** The first £1 million qualifies for 100% relief, the remaining £0.5m receives only 50% relief. Effective value subject to IHT is £250,000 – significantly higher than previously.
- **Pension saver approaching £1m estate:** With the upcoming change, £200,000 in unused pension funds could be counted in the estate, pushing liability higher. Restructuring or distributing funds may reduce exposure.
## Actionable Takeaways Before April 2026/27
- **Review asset values** and ensure ownership is structured to use full reliefs.
- **Consult a specialist** about pension estate inclusion to align with your timeline.
- **Update wills and trusts** to reflect new thresholds and spouse/civil partner transferability.
- **Document valuations** now, as future uncertainty may lead to dispute.
These reforms bring inheritance tax into sharper focus. Proactive planning can trim liabilities, but delays past the effective dates (6 April 2026 and 6 April 2027) risk significant additional tax exposure.