New Inheritance Tax Cap Announced – Here's How to Protect Your Estate

🚨 Big Changes to Inheritance Tax Are Coming – Are You Ready? 

 

Farmers, business owners & non-doms: these new rules could seriously affect your estate plans. 

 

 

📢 The UK government announced major IHT changes in the Autumn Budget. 

 

Starting in April 2026, Agricultural Property Relief (APR) and Business Property Relief (BPR) will be capped at £1 million combined. 

 

💣 Go over the cap? You’ll face a 20% inheritance tax charge on the excess. 

 

Even Bigger News for Non-Doms 

 

If you're a non-domiciled individual living in the UK… 

 

From April 2025, IHT will become residence-based, not domicile-based. 

 

💼 That means long-term UK residents will be taxed on worldwide assets, regardless of where you call "home." 

 

 

These changes will increase the IHT burden for many estates. 

 

Without a plan, your family might face hefty tax bills, or be forced to sell assets like property or shares just to pay them. 

 

But there are ways to protect your legacy. 

 

Life Insurance in Trust = A Smart Solution 

 

One powerful option? 👉 Write your life insurance policy into a trust. 

 

This simple move can shield your payout from inheritance tax and help your loved ones access the money quickly, without probate delays. 

 

 

A trust is a legal setup where your life insurance policy is held by trustees, for the benefit of your chosen beneficiaries. 

 

💡 When you die, the money goes directly to the trust, not your estate, keeping it outside the IHT calculation. 

 

 

✨ Top Benefits: 

 

✔️ No IHT on the payout 

✔️ Fast access to funds, skip the probate wait 

✔️ Helps cover any IHT due, avoiding forced sales of family assets 

✔️ Great for covering gifts made within 7 years of death (IHT can still apply!) 

✔️ Non-doms? It can protect your global assets from the new rules 

 

 

🔹 Bare Trust – Fixed beneficiaries, simple and straightforward 

🔹 Discretionary Trust – Trustees have control, flexible payouts 

🔹 Flexible Trust – Combines both: default beneficiaries + trustee flexibility 

🧠 Choosing the right one depends on your goals and who you want to benefit. 

 

 

⚠️ Once your policy is in trust, you don’t control it directly—your trustees do. 

📋 Any changes require their agreement. 

📆 Some trusts (like discretionary ones) can face extra charges—but in most cases, life insurance policies don’t trigger these while you're alive. 

 

 

Setting up a trust is powerful, but it must be done properly. 

Poor drafting = tax headaches or delays for your loved ones. 

Our expert advisers can help you navigate the changes, set up the right trust, and future-proof your estate plan. 

 

📩 DM us or hit the link in bio to speak with a chartered accountant today 

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💬 Got questions? Drop them in the comments! 

 

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