Do you need to update your Inheritance Tax plan?

Regularly reviewing your inheritance tax plan is crucial as tax rules change. Learn more about recent updates in our recent Q&A with The Scotsman.

“I already have an Inheritance Tax plan – do I need a new one?”

The answer is yes – inheritance tax (IHT) planning isn’t a one-time process. Both tax laws and personal circumstances can change over time, making regular reviews essential.

As an example, take James and Sarah, who set up a life assurance policy a decade ago to cover their IHT liability. They assumed tax allowances would rise with inflation, but recent changes mean their plan may no longer be sufficient.

The Autumn Budget confirmed that the Inheritance Tax threshold will remain frozen until at least 2030, increasing the number of estates subject to tax. More significantly, pensions will become assessable for IHT from April 2027, a major shift from previous exemptions. This pushes James and Sarah’s estate value above £2 million, eroding their tax-free allowances and increasing their tax exposure.

With rising life assurance premiums and new tax rules, their original strategy may no longer be the best approach. Their situation highlights the importance of reviewing Inheritance Tax plans regularly to avoid unexpected liabilities.

Read the full Q&A feature in The Scotsman here.

Editor’s Notes

Published in Scotsman Money 24th March 2025

The information provided on Inheritance Tax planning is the opinion of Andrew Sutherland and should not be considered advice.

Acumen Financial Planning Ltd is authorised and regulated by the FCA, FRN 218745.