In a recent roundtable we found that one of the major themes for private client taxation was inheritance and succession. Vicky Lad of Shaw Gibbs outlined the Inheritance Tax changes, in particular the inclusion of most unused pension funds and pension death benefits in estates from April 2027.

For many people, that overturns the assumptions behind their long-term planning. Pensions have often been treated not just as retirement funding but as a tax-efficient way of passing wealth on.

Vicky also highlighted the changes to Business and Agricultural Property Relief, which mean that qualifying assets above the £2.5 million allowance now receive only 50% relief, rather than the previous 100%. She cautioned that the pension changes could bring people who had never previously expected to face an inheritance tax liability into its scope, while also creating additional complications for executors and pension administrators when settling estates.

John Tabbinor of Amber Financial Planning described how it has been common practice over the years to maximise pension savings with the specific aim of passing the pot of money to beneficiaries outside their estates for IHT purposes.

Those arrangements now need rethinking, and he outlined the growing level of enquiries about this.

He highlighted several planning options for pension pots.

One is taking the maximum tax-free entitlement and gifting it, keeping in mind that the value of any gift would fall back into their estate if they subsequently died within the following 7 years.

Another strategy could be to withdraw a higher taxable pension income than required for normal expenditure needs, albeit with consideration for an individual’s marginal rate of income tax, then gifting this to beneficiaries.

A regular gift out of surplus income is considered by HMRC to be immediately outside of an individual’s estate for IHT purposes. That must at least be annual, as there is a need to be able to demonstrate a pattern.

Looking beyond pensions, a ‘whole of life’ insurance policy written in trust (simple form) can give beneficiaries funds to meet a future inheritance tax liability.

Tabbinor works with clients to calculate what the potential IHT liability may be and uses this as the starting sum assured, with payout on death. In the case of a married couple, the advice would generally be to use a joint policy and set to pay out on second death – the point at which IHT would be due.

He stressed the importance of keeping an up-to-date will and regularly reviewing any estate planning arrangements as circumstances and regulations change. No single strategy works for everyone, but planning done under the old rules can no longer be assumed to be optimal.

Professional advice is going to come into its own.

Referring back to those changes to agricultural and business property relief, a discussion sprang into life looking at the implications for farms, estates and family-owned businesses. Ally Palmer of Carter Jonas reported increased valuation work linked to inheritance tax planning. He also raised a perspective that may feel uncomfortable within the sector: while higher exposure creates real challenges for established farming families, it may also encourage some landowners to release land that would otherwise stay in the family for generations. The impact on some farming families is real and unarguable. That said, while the changes will have a detrimental effect on the overall agriculture industry, for young farmers, tenant farmers and new entrants, who struggle to acquire land because of its cost and scarcity, this is a development which could open opportunities.

The room also stressed the value of succession conversations themselves. Farming families in particular can face legal disputes where expectations rest on informal promises rather than documented arrangements.

As Tom McInerney of SE Solicitors put it so aptly, if these changes in fact push families to have those difficult conversations earlier, there may at least be some benefit.

Succession planning is not just about minimising tax. It is about people, relationships, expectations and the future of businesses and assets that may have taken generations to build – and that takes more than tax advice alone.