Estate planning after the Autumn Budget: What now?

Estate planning after the Autumn Budget: What now?

Last month’s Autumn Budget introduced significant measures for anyone reviewing their Will, Trusts, or wider estate planning.

At Hay & Kilner, our Wills, Trusts & Estates Team is here to help you understand what these changes mean for you and to help you take proactive steps to protect your estate.

Key changes and what they mean for you

Rises in tax on income from assets

• Tax on dividend income will in some cases increase by 2 percentage points from April 2026.
• Tax on savings income will increase by 2 percentage points across all bands, from April 2027.

If you currently have assets in a trust which produce such income, it may be worth seeking financial advice to review its structure and current investment strategy.

Inheritance Tax thresholds frozen until 2031
The Inheritance Tax nil rate band remains at £325,000 and the Residence Nil Rate Band stays at £175,000 until 2031.

• The Nil Rate Band allows up to £325,000 of your estate to pass free from Inheritance Tax.
• The Residence Nil Rate Band applies when leaving your main home to children or grandchildren.

With property values continuing to rise, it is likely that more estates will fall into the taxable bracket. Planning ahead is essential to mitigate potential liability.

Agricultural & Business Property Relief (APR and BPR)
If you own a family farm or business, APR and BPR can reduce or eliminate Inheritance Tax on qualifying assets.

• APR is available on gifts of land occupied for the purposes of agriculture, together with farmhouses and buildings. The property must have been either occupied by the owner for the purposes of agriculture for 2 years prior to the gift or leased to someone else for 7 years who used it for farming. Relief can be given at 50% or 100% depending on whether certain conditions have been met.
• BPR reduces the value of a gift of “relevant business property” for Inheritance Tax purposes whether such gift is made during a person’s lifetime or on death. Again, relief can be given at 50% or 100% depending on whether certain conditions are met by the “relevant business property”.

The Budget has made the following changes to the application of these reliefs:

• From April 2026, the first £1 million of qualifying agricultural or business assets will still receive 100% relief but amounts above this will only receive 50%. This was announced in the 2024 Budget and remains unchanged.
• From April 2026, married couples and civil partners can transfer unused APR and BPR allowances, potentially doubling relief to £2 million on the second death.

Due to these changes, now is an important time to seek advice on whether your assets qualify for these relief’s and to ensure that you are maximising the available exemptions and reliefs through your Will.

Compensation Payments for victims of the infected blood scandal will be exempt from Inheritance Tax
Compensation payments under the Infected Blood Compensation Scheme will now be formally exempt from Inheritance Tax.

• If the payment is made to someone alive, or to the estate of someone who died before receiving it, beneficiaries will not pay Inheritance Tax.
• However, any later transfers from a beneficiary, for example to children, will be subject to the usual Inheritance Tax Rules.

What should you do now?

The Budget changes highlight the importance of acting sooner rather than later. Here are practical steps you can take with our support:

• Review your Will: Ensure it reflects current tax rules and maximises available allowances.
• Assess Trust structures: Rising tax rates mean Trusts may need restructuring to remain efficient.
• Plan for Inheritance Tax: With thresholds frozen, more estates will be caught. We can advise on lifetime gifting, Trusts, and reliefs.
• Consider APR & BPR strategy: If you own a farm or business, we’ll help you decide whether to use allowances on first death or preserve them for later.

How Hay & Kilner can help

Our Private Client Team specialises in estate planning, Wills, and Trusts. We provide clear, practical advice tailored to your circumstances.

Estate planning is not just about reacting to Budget change, it’s about shaping your future with confidence. Get in touch and we can help you take the right steps now to protect your family and your assets by contacting us at 0191 232 8345.