Understandably, everyone is focusing on the Budget announcements due on November 26th. But there are some changes which have already been announced, which are coming into force from April 2026, which should be on your radar.

Changes to Inheritance Tax rules could have a significant impact on you and your family’s wealth, and understanding your exposure is important.

From April 6th 2026, the current reliefs available on shares in unquoted trading companies are being restricted. This means that, depending on who inherits your shares, Inheritance Tax could apply at an effective rate of 20% on any value above £1 million. For example, on a shareholding worth £1.5 million, this could mean a tax bill of £100,000, whereas currently there would be nothing due.

This raises a few key considerations if shares are held on your death:

• Your family or other beneficiaries may need to fund the tax from other personal assets, or they may need to turn to the company for support, which could cause cashflow issues for remaining shareholders and directors.

• Holding too much cash in the business ahead of this could risk losing trading company status, meaning 40% tax might be due on the full value of the shares instead.

From April 6th 2027, additional changes will impact pension planning. At the moment, most individuals’ undrawn pension savings are not subject to Inheritance Tax on death. But from April 2027, if someone dies with unused pension funds, those remaining funds and any death benefits may be treated as part of their estate and could also become liable to Inheritance Tax.

A Family Investment Company (FIC) is a corporate structure that allows families to manage and grow their wealth collectively. Like any company, it has shareholders, and it can be used to involve younger generations in investment decisions before they assume full control.

There are several ways to fund an FIC. Individuals may contribute cash, transfer assets such as property, or introduce funds from sources like inheritance or pension lump sums. Typically, an FIC does not hold cash at inception, so contributions are often made in exchange for a loan (commonly referred to as an “I-O-U”), which the company owes to the contributor. These loans can be repaid tax-free in the future or gifted to other family members as part of estate planning.

Over time, as ownership is shared among family members, the growth in value of the company may fall outside the original shareholder’s estate, offering potential inheritance tax benefits. Additionally, gifting the loan to children or grandchildren can further reduce the taxable estate, provided the donor survives for seven years after the gift.

The tax position of establishing an FIC by subscribing for shares or lending funds will depend on the assets being transferred. Getting advice in advance of using this structure will be important to ensure it meets your objectives.

There is still time to plan ahead before these changes take effect. Specifically looking at the best way to protect the value you’ve built up and reduce any future tax exposure.

At Kreston Reeves we are advising clients on a number of possible actions, including:

• Review your estate and gifting options. A lifetime gift (and surviving 7 years) is still one of the most effective strategies.

• Review your Will. This can be structured to make the most of the available reliefs.

• Look at life insurance. It’s often used to cover IHT liabilities and can be tailored around your wider planning.

• Review your pension funds and consider if there are any changes to be made prior to April 6th 2027.

• Consider if a Family Investment Company (FIC) is an option for you.