The Chancellor’s Budget yesterday may have sent ripples through many households across the country. Much of the early attention has focused on personal taxation and the growing pressure on middle-income families, with commentators agreeing that the impact will differ widely depending on individual circumstances.
Tasbiah Shoaib, an Associate and Chartered Legal Executive in Waldrons’ Wills and Probate team, offers an impartial insight at a time when many families are looking for grounded guidance. Tasbiah has extensive experience in drafting Wills, managing complex estates and advising clients on tax-efficient planning, Lasting Powers of Attorney and probate administration. These areas become even more important when policy shifts create uncertainty.
Although speculation about reforms has been circulating for weeks, today’s Budget confirms that Inheritance Tax (IHT) remains firmly under review. At this stage, the finer detail of IHT policy is still emerging.
A consistent theme is the Government’s decision not to raise thresholds in line with inflation. Currently, the Nil Rate Band is £325,000 and Residence Nil Rate Band is £175,000. Both will be frozen until April 2031. Freezing allowances at their current levels is likely to draw more estates into the IHT bracket in the coming years, particularly as property values continue to rise. For many families, this means the risk of unintended tax exposure is growing, even when they may not consider themselves wealthy.
If thresholds remain unchanged while the wider tax burden increases, Executors and Beneficiaries may find themselves navigating a more complex and demanding landscape when administering an estate.
Further, as announced at Autumn Budget 2024, the Government will bring most unused pension funds and death benefits into the scope of IHT from April 2027. Providing more clarity regarding this, the recent Budget confirms Executors can ask pension scheme administrators to withhold 50% of the fund for up to 15 months and pay the IHT directly to HMRC. Executors may find this clarification helpful when administering an estate. However, it does not take away from the fact this change will further expand the number of estates subject to IHT.
This is where early, tailored estate planning makes a real difference. At Waldrons, our Wills and Probate team works closely with families to protect assets, provide clarity and reduce avoidable tax. This includes reviewing Wills in light of new policies, maximising the Residence Nil Rate Band, exploring gifting strategies and considering long-term care and lifetime planning.
Tasbiah stresses that the key is preparation, not panic. She explains:
“Budgets always create a moment of uncertainty, especially when thresholds stay frozen and the cost of living reshapes how families save and invest. The best protection is understanding how the rules apply to your personal circumstances and reviewing your estate plans early. Clear planning today gives families reassurance for tomorrow.”
If today’s Budget has raised questions about Inheritance Tax, your Will or your long-term planning, our Wills and Probate team is here to help you navigate the changes with confidence.
