Are you one of the many unaware of the upcoming Inheritance Tax changes?

Recent research by Canada Life has revealed a knowledge gap surrounding changes to Inheritance Tax (IHT), set to come into effect in April 2027.

Astonishingly, around 8.5 million people remain unaware that pensions will soon be subject to IHT, a change expected to nearly double the number of estates liable for the tax by 2030.

For those who have not yet adjusted their financial plans, now is the time to act.

The Government’s announcement during the Autumn Budget highlighted that by the 2029/2030 tax year, almost one in 10 estates could be subject to IHT, contributing an estimated £1.46 billion to the Treasury.

Are you prepared for these changes?

While six per cent of Britons have already adjusted their financial plans, the majority are yet to act.

For those aged 55 and over, one-third are unaware of existing gifting rules that could significantly reduce their IHT liability.

Among those who have started planning:

  • 57 per cent plan to spend more of their savings
  • 41 per cent intend to gift more to loved ones
  • 38 per cent aim to withdraw lump sums from their pensions
  • A smaller number (10 per cent) view marriage as a means to transfer wealth tax-free to a partner

Common gifting rules – are you in the know?

Canada Life’s research also revealed a widespread lack of knowledge about IHT gifting rules:

  • £250 annual gifts – Nearly eight in 10 people are unaware that they can gift up to £250 per person annually to an unlimited number of individuals without incurring IHT.
  • Gifts from income – The same number do not realise that gifts made from income are exempt from IHT.
  • Spousal exemption – Almost seven in 10 people do not know that gifts between spouses or civil partners are free of IHT.
  • Seven-year rule – Half of those surveyed did not know that financial gifts can be exempt from IHT if the donor lives for at least seven years after giving them.
  • Annual Exemption carryover – Nine out of 10 people are unaware that unused Annual Exemption allowances (currently £3,000 per year) can be carried forward to the next tax year.

The upcoming changes mean that without proactive planning, you or your loved ones could face significantly higher IHT bills.

By understanding the rules and adjusting your financial strategy, you can reduce your liabilities and ensure that more of your wealth goes to your chosen beneficiaries.

Our team of expert advisers can help you navigate these complex changes and make the most of IHT reliefs and exemptions.

Don’t leave it too late, get in touch with us today for advice on IHT and securing your financial future.