23.5.2026 | Tax

Inheritance tax is no longer a concern reserved for the ultra-wealthy. Here, Andrew Diver, Head of Tax at Beatons Group, looks at how rising property prices, frozen tax thresholds and upcoming pension changes mean more families and business owners than ever are likely to be drawn into the inheritance tax net.

Recent figures from HMRC revealed inheritance tax receipts have reached record levels for the fifth consecutive year, with the Government collecting £8.5 billion in the last tax year alone.

With further reforms on the horizon, it has never been more important for individuals to understand the value and structure of their estate.

But many people remain unaware of just how exposed they may now be.

Inheritance tax is increasingly affecting families who would never previously have considered themselves wealthy enough to be impacted. Frozen thresholds, combined with rising property values and investment growth, mean more estates are creeping over the limit every year.

The introduction of changes to Business Relief, alongside upcoming reforms to the treatment of pensions, means many business owners and families may need to reassess their planning far sooner than they expected.

Under current rules, pensions have generally been excluded from a person’s estate for inheritance tax purposes. However, proposed changes expected to come into effect next year could alter how certain pension assets are treated, potentially increasing exposure for some families.

The new legislation surrounding pensions and inheritance tax is already proving complex.

The detail emerging around pension changes is complicated and, in some areas, still evolving. What is clear is that individuals can no longer assume pensions will automatically remain outside their taxable estate.

That makes it even more important to understand your overall financial position and review existing arrangements regularly.

Business owners may face additional challenges due to the proposed reduction in Business Relief available on qualifying business assets. This move could significantly impact succession planning for family-owned firms.

Early planning remains the most effective way to protect assets and reduce future tax burdens.

There are still a range of legitimate planning options available, whether through lifetime gifting, reviewing asset allocations, succession planning or making full use of available reliefs and exemptions.

The key is not to leave these conversations too late. The earlier people understand their position, the more options they are likely to have.

Inheritance tax planning should not be viewed purely as a tax exercise, but as part of wider long-term financial and family planning.

For many families, this is about ensuring assets pass on as intended, protecting businesses for future generations, and avoiding unnecessary stress or uncertainty down the line.

For help and advice about how this could affect you and your business, visit www.beatons.co.uk