Why rewriting your Will in wake of planned inheritance tax changes is the wrong thing to do

Steve Bish’s advice comes after the Chancellor announced alerations which will include new rules surrounding unused pensions and changes to businesses and farm assets.

It has prompted concern among many with reports that some people are rushing to make changes to their Wills.

But Steve, the founder of S Bish Estate Planning, said: “My advice is don’t do anything at all. With the government announcing changes to inheritance tax, it’s natural that many people are wondering whether they need to rewrite their Will. But right now I’m advising my clients to “do nothing.”

“From April 6th 2026, the IHT rules on business and agricultural assets will change with a new allowance imposed of £1 million. This is where estate planning is important.

“But more people are likely to be affected by the changes to pensions. Currently, unused pensions are typically paid tax-free to a beneficiary but under proposed changes, unused pension savings could be taxed as part of your estate if it exceeds the IHT threshold of £325,000.

“While it might be tempting to rush through changes to your estate, it is better to wait.

“This is because whilst these changes are proposed they are still subject to being enacted in law.

“If the government does go ahead with including pensions in people’s taxable estates then any changes should be made based on what is written down in law.

Personally, I’ll be surprised if the government implements these changes in the time scale they’ve given. Writing and passing legislation is a technical and time-consuming process, so I expect them to push back the date from the proposed April 2027.

“But if these changes do go ahead as planned then it’s likely we’ll see pensions being used as a way of providing income during retirement (as they were originally intended) rather than just savings and estate planning tools.

“It’s also worth remembering that the spousal exemption will remain and no inheritance tax

will be due on anything left to a spouse or civil partner.

We don’t have sight of any draft legislation and there has been no feedback out of consultation exercises. I anticipate that we will only see the draft legislation when the 2026 Finance Bill is published.”

The other rules surrounding IHT have not changed with the allowance remaining at £325,000 and the residence nil-rate band for estates under £2 million remaining at £175,000, which have been frozen until April 2030. After this, the rate of taxation is 40%.

Steve advises people to keep an eye on any announcements so you are prepared should you need to make changes.

“There is some speculation that there may be changes made to the seven year window for potentially exempt transfers. I will be closely watching the Spring Statement on 26 March to see if new measures are announced – but again, the most important advice I can give is to hold off until we know what ends up in the small print.”