Jonathan Halberda, specialist financial adviser at Wesleyan Financial Services, warns that growing speculation over inheritance tax reforms is driving households to make rash financial decisions — and says seeking expert advice early is the best way to protect family wealth before the Autumn Budget.
Jonathan Halberda, specialist financial adviser at Wesleyan Financial Services, said: “As IHT receipts continue to rise in the run up to the Autumn Budget, so does the worry from households about what further changes to the tax might come.
“We’re hearing from a wider range of clients than ever – business owners, teachers, senior NHS staff – all deeply worried about what might be announced, and how quickly it would take effect.
“With rumours already circulating, such as changes to gifting, some are considering rushing to pass on wealth to loved ones or even withdrawing pension savings early. But panic planning rarely pays. While the anxiety is understandable, these moves can trigger unexpected tax bills or cause lasting damage to your long-term financial security that can be difficult, if not impossible, to undo.
“The smartest move now isn’t to panic, but to prepare. By seeking expert advice early, families can protect their wealth, keep their options open, and be ready to act with confidence when the Chancellor delivers the Budget.
“A few practical steps to help manage IHT exposure include:
1. Use gifting rules while they’re still clear
“Gifting remains a proven way to reduce IHT liability, but with rumours swirling around possible caps and changes, acting under today’s rules may offer more certainty.
“Currently, you can:
- Give up to £3,000 per year tax free
- Make unlimited gifts to a spouse or civil partner
- Gift from surplus income immediately IHT free – if it’s regular, affordable, and well-documented
“Most other gifts fall under the seven-year rule, so timing matters. Early planning and professional support can help you maximise the impact of any gifts and avoid surprises.
2. Consider a trust to stay in control
“Trusts let you pass on assets while keeping a say in how and when they’re used making it especially useful for younger or vulnerable beneficiaries.
“They’re often a middle ground for those uneasy about gifting large sums outright. But trusts are complex, and with potential reforms to how they’re taxed, it’s wise to get advice now to ensure your intentions aren’t derailed later.
3. Don’t rush into pension decisions
“From April 2027, pensions will become part of the IHT net, even if you pass away before reaching minimum pension age.
“On top of that, if you die after 75, beneficiaries may also pay income tax on withdrawals, pushing the total tax burden beyond 60% in some cases.
“Understandably, some are exploring early drawdowns to avoid this. But hasty decisions could reduce your future income and trigger avoidable tax liabilities. While the government has suggested future reliefs might apply when inherited pensions are used to pay IHT, nothing is confirmed yet so take advice before acting.
4. Review how your partner is protected
“That can mean a surprise tax bill on inherited property or shared assets, particularly where couples have no children or close relatives to inherit.
“With talk of tightening IHT reliefs, formalising a relationship could be a financially smart move.
5. Check your will is working hard enough
“Your will isn’t just a way to pass on assets, it’s a vital tax planning tool.
“A clear, up to date will helps you:
- Maximise allowances
- Avoid family disputes
- Reduce the risk of higher IHT bills
“Without one, intestacy rules could override your wishes and push more of your estate into the taxman’s hands. With IHT reform in the spotlight, now is the time to review your plans before changes come into effect.”
