Farra is a death administration assistant for UK families. Get step-by-step guidance for registering a death, applying for probate, notifying banks, and managing bereavement admin. From essential documents to practical checklists, Farra simplifies estate paperwork and funeral-related tasks so you can focus on what matters.
6 April 2026: BPR/APR capped at £2.5m (20% IHT above). 6 April 2027: Pensions included in IHT (double taxation). 56% UK adults lack wills. New Year tasks: create/update will, review IHT position (£325K threshold frozen until 5 April 2031), consider lifetime gifts (7-year rule), update pension/insurance beneficiaries, appoint lasting power of attorney.
The new year brings a natural opportunity to get your affairs in order. With the inheritance tax changes that took effect in April 2026 and those due in April 2027, it is a useful moment to review your estate planning.
Key dates:
The New Year Advantage:
January is when we're most motivated to make positive changes. Over 56% of UK adults don't have a will, and 11% have wills that are outdated. This year, make estate planning one of your resolutions that actually sticks.
If you don't have a will, your estate will be distributed according to intestacy rules - which may not reflect your wishes at all.
Key points:
Update your will if: You've married, divorced, had children, bought property, or experienced significant changes in your finances since it was written.
From April 2027, unused pension funds will be subject to inheritance tax. This makes your beneficiary nominations more important than ever.
Action required:
This change could add an average of £34,000 to inheritance tax bills for affected estates.
An LPA allows someone you trust to make decisions on your behalf if you lose mental capacity. Without one, your family may need to apply to the Court of Protection - a costly and stressful process.
Two types of LPA:
Cost: £92 per LPA to register with the Office of the Public Guardian. Reductions and exemptions are available on a low income or certain benefits. Any professional fees are on top and vary by provider.
The Property (Digital Assets etc) Act received Royal Assent in December 2024, meaning cryptocurrency and NFTs are now formally recognised as property that can be inherited.
Create a digital inventory:
Important: Never include actual passwords in your will (it becomes a public document). Instead, reference where secure password information is stored.
One of the most valuable things you can do is have open conversations with your family about your wishes. This reduces conflict and stress during an already difficult time.
Topics to discuss:
The Autumn Budget 2024 announced significant changes to inheritance tax reliefs, which took effect on 6 April 2026. The allowance announced then was £1 million; the government raised it to £2.5 million on 23 December 2025, and £2.5 million is the figure now in force under Finance Act 2026.
Before April 2026: 100% relief on qualifying business assets (unlimited)
From 6 April 2026: 100% relief up to £2.5 million combined with agricultural relief, then 50% relief (effectively a 20% IHT rate)
Example: A £3 million business would previously have paid £0 IHT. From 6 April 2026: £2.5m at 0% + £0.5m at 20% = £100,000 IHT.
Before April 2026: 100% relief on qualifying agricultural property (unlimited)
From 6 April 2026: 100% relief up to £2.5 million combined with business relief, then 50% relief
Unused allowance can transfer to a surviving spouse or civil partner, giving couples up to £5m combined, but only if it is claimed on form IHT437. The October 2024 announcement had said the allowance would not be transferable; that was changed at the Budget in November 2025.
AIM shares previously qualified for 100% BPR after 2 years. Since 6 April 2026 they receive 50% relief in all circumstances, and they do not use up the £2.5m allowance. See our April 2026 deadline guide for more detail.
The window for making gifts under the old uncapped rules has closed, and gifts made on or after 30 October 2024 do not escape the new rules simply by predating them:
Understanding the current thresholds helps you assess whether your estate might be liable for IHT:
| Allowance | Amount | Notes |
|---|---|---|
| Nil Rate Band (NRB) | £325,000 | Frozen until 5 April 2031 |
| Residence Nil Rate Band (RNRB) | £175,000 | If leaving home to direct descendants |
| Combined (Single Person) | £500,000 | NRB + RNRB if qualifying |
| Combined (Married Couple) | £1,000,000 | Transferable between spouses |
RNRB Taper Warning:
If your estate exceeds £2 million, the Residence Nil Rate Band is reduced by £1 for every £2 over the threshold. Estates over £2.35 million lose the RNRB entirely.
A will can be written without a solicitor. The situations where people most often involve one, because the drafting or the tax is harder, are:
Yes. While your spouse will inherit most of your estate under intestacy rules, they may not get everything - especially if you have children. Assets over £322,000 are split between spouse and children. A will ensures your spouse is fully provided for and avoids potential complications.
Review your will every 3-5 years, or after major life events: marriage, divorce, birth of children/grandchildren, death of a beneficiary or executor, significant changes in assets, or moving to a different country.
An outdated will is still legally valid, but may not reflect your current wishes. Worse, marriage automatically revokes a previous will (unless made "in contemplation of marriage"), meaning you could die intestate without realising it.
Yes, through legitimate planning: gifts (potentially exempt after 7 years), charitable donations (reduce rate to 36%), business and agricultural reliefs, life insurance in trust, and pension planning.
Only if you own a business, farm, or significant AIM shareholdings worth over £2.5 million. For most people, the standard IHT thresholds (£325,000 NRB + £175,000 RNRB) remain unchanged. The pension changes in April 2027 affect more people - check your pension value and beneficiary nominations.
A will, a record of where things are, and an up-to-date beneficiary nomination are what the people administering an estate actually have to work from. Where they exist, the work is quicker and there is less to argue about.
Start with your will. Everything else follows from there.