Inheritance Tax (IHT) rules are changing, with important reforms having recently taken effect from April 2026 and further changes to follow in April 2027. These developments may affect many families, business owners, and farmers across Yorkshire and beyond.

Understanding what is changing now gives you time to review your plans and avoid unexpected tax issues later.

  1. Changes from April 2026

From 6 April 2026, long‑established inheritance tax reliefs are more restricted:

  • Business Property Relief (BPR) and Agricultural Property Relief (APR) will no longer be unlimited.
  • Each individual will have an allowance of up to £2.5 million (transferable between spouses or civil partners) within which qualifying business or farming assets can still pass free of inheritance tax.
  • Any value above that level will usually now receive only 50% relief, meaning that some businesses and farms that were previously passed down without an inheritance tax bill may now face one for the first time.
  • AIM‑listed shares, which previously received 100% relief, will now generally qualify for only 50% relief, reducing their use as a simple inheritance tax planning solution.

  1. Changes from April 2027

From 6 April 2027, unused pension funds are expected to form part of a person’s estate for inheritance tax purposes. Pensions have traditionally been an effective way of passing on wealth tax‑efficiently. This change may have a significant impact on existing estate planning arrangements.

  1. What Has Not Changed

  • The nil‑rate band remains at £325,000.
  • The residence nil‑rate band remains at £175,000, where applicable.
  • These allowances have been frozen for several years and are not increasing.
  • As a result, more ordinary family estates are being brought within the inheritance tax regime as property and asset values rise.

  1. Why a Review Is Sensible

Many Wills and estate plans were made under very different rules. With pensions and business assets now treated more strictly, reviewing your arrangements can help ensure your wishes are still met and your family is protected.

For help and advice, contact our experienced Wills and Probate Team. At Ison Harrison we have a wealth of experience and already look after over 50,000 wills for clients in Yorkshire and beyond.

Contact our Castleford office on 01977 557 171 or email hello@isonharrison.co.uk and one of our friendly team will be happy to have a chat with you.