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Major IHT changes make 2026 critical. 6 April 2026: BPR/APR capped at £1m (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 2030), 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 major inheritance tax changes coming in April 2026 and April 2027, there's never been a more important time to review your estate planning.
Critical Deadlines in 2026:
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 Over 56% of UK adults don't have a will, and 11% have wills that are outdated.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: £82 per LPA to register with the Office of the Public Guardian, plus solicitor fees if used (£300-£500).
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 that take effect on 6 April 2026. If you own a business, farm, or AIM shares, these changes could significantly impact your estate.
Before April 2026: 100% relief on qualifying business assets (unlimited)
From April 2026: 100% relief up to £1 million, then 50% relief (effectively 20% IHT rate)
Example: A £3 million business currently pays £0 IHT. From April 2026: £1m at 0% + £2m at 20% = £400,000 IHT.
Before April 2026: 100% relief on qualifying agricultural property (unlimited)
From April 2026: 100% relief up to £1 million, then 50% relief
Good news: Autumn Budget 2024 confirmed that unused £1m allowance can transfer between spouses, giving couples up to £2m combined.
AIM shares currently qualify for 100% BPR after 2 years. From April 2026, they will only receive 50% relief (no £1m allowance applies). See our April 2026 deadline guide for urgent action steps.
Action: Review your AIM holdings and consider whether they should remain part of your estate planning strategy.
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 2030 |
| 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.
While simple wills can be done yourself or through online services, seek professional advice if:
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. Seek professional advice for complex situations.
Only if you own a business, farm, or significant AIM shareholdings worth over £1 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.
Estate planning isn't about death - it's about protecting the people you love. By taking action in January 2026, you're giving your family clarity, reducing potential conflict, and ensuring your wishes are respected.
With major tax changes on the horizon, there's never been a more important time to review your plans. Don't let another year pass without taking these crucial steps.
Start with your will. Everything else follows from there.
Learn how to write a legally valid will in the UK. Legal requirements, what to include, DIY vs solicitor costs, and common mistakes to avoid.
How to contest a will: valid grounds, who can contest, caveat process, mediation vs court, costs £3K-£100K+, success rates, and timeline.
Agricultural Property Relief and Business Property Relief capped at £2.5m from April 6th 2026. Critical deadline for farms, businesses, and AIM portfolios.
Urgent checklist for executors before April 5th tax year-end. Capital Gains Tax allowances, IHT planning, and estate admin actions before April 6th changes.
Probate needed if estate has property or over £50K. Joint accounts exempt. Check bank thresholds: HSBC £50K, smaller banks £15K.
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