You can’t move these days without tripping over an advert for “Find your ancestors!” or “Discover your Viking roots for just £89.99!” — and thanks to all those home DNA kits, family secrets aren’t quite as secret as they used to be.

So it’s probably no surprise that more and more people are finding themselves caught up in family estate dramas — missing wills, surprise half-siblings, and long-lost cousins who appear just as the house sale completes.

And as accountants, advisers, executors, or just the poor souls left to deal with it all, we’re often the ones asked:

• “Where’s the will?”
• “What happens if there isn’t one?”
• “Are we even allowed to give out the money yet?”

This month, we’re diving into the fascinating (and occasionally chaotic) world of what happens when a person dies without a clear paper trail — or when the will that’s meant to make life easy, well… doesn’t.

Why this matters

People assume that when they die, everything will automatically “sort itself out.”
It doesn’t.

In fact, when there’s no will or a missing will, it’s a legal and emotional minefield — and the people left behind are the ones who have to navigate it.

The three big problems we see over and over again are:

1. Nobody can find the will. It was “done properly years ago,” but nobody knows where it went.
2. There was never a will in the first place.
3. Someone turns up later — often armed with a birth certificate or DNA match — saying, “I think I’m related…”

Each of these situations can completely change who inherits and how, and if you’re the one dealing with the estate, you’re legally responsible for getting it right. (No pressure, then.)

1. When the Will’s Gone Walkabout

The first (and most common) problem. The person definitely made a will. A proper one. With witnesses and everything. But nobody can find it.

Sometimes it’s in a solicitor’s strongroom, sometimes in a bank safe, and sometimes in the biscuit tin marked “old receipts and things to keep.”

Occasionally it was never registered anywhere — because wills don’t have to be — so it becomes a guessing game of which firm wrote it 25 years ago and whether that firm still exists

Click here for our deeper dive into “The Case of the Missing Will” — how to trace one, who to contact, and how to avoid a family version of The Crystal Maze.

2. When There Was Never a Will

If there’s no will, the law steps in with its own version of “fairness” — a set of rules written by people who clearly never met your family.

Spouses, children, parents, siblings… there’s a strict pecking order, and unmarried partners don’t even make the list.

This can lead to some fairly brutal real-world results — like the partner of 20 years being told to pack up and move out because the house wasn’t in their name.

If you die without a will, the law steps in with its own plan — and spoiler alert: it’s not always what you’d want. Unmarried partners? Out. Stepchildren? Ignored. Exes? Occasionally back in the mix. Welcome to the Rules of Intestacy — a system that proves life after death can still be complicated.

Click here for “When There’s No Will: The Great British Guessing Game” — our guide to what really happens under the Rules of Intestacy.

3. The Trickle-Down Test

When the law starts dividing an estate, it doesn’t hand out cheques at random — it works down a family tree like water running downhill.

If a child has died, their share trickles down to their own children, and so on. That’s straightforward until you realise how many branches of the family might exist — especially now that “23andMe” is outing surprise relatives faster than Christmas arguments do.

Inheritance under intestacy sounds simple: it goes “to the next of kin.” But who’s that, exactly? And what happens when DNA databases start turning up half-siblings nobody knew about? Welcome to the trickle-down effect — where the law decides who inherits, and Ancestry.com provides the plot twists.

Click here for “The Trickle-Down Explained” — a plain-English guide to how the inheritance hierarchy really works, with examples that won’t make your head spin.

4. When You’re the One Left Sorting It Out

If you’re the poor relative who’s just discovered you’re responsible for “sorting the estate,” congratulations — you’ve inherited paperwork, stress, and potential liability.

Without a will, you’ll need to apply for Letters of Administration, make reasonable enquiries to find all possible heirs, and (most importantly) protect yourself in case someone pops up years later claiming a share.

That protection usually means:

• Publishing Section 27 Notices in The Gazette and local paper,
• Possibly using a genealogist or “heir hunter” to map out the family tree,
• And, for bigger estates, taking out Missing Beneficiary Insurance — just in case an unexpected DNA match comes knocking.

Click here for “The Administrator’s Survival Guide” — what to do, what to avoid, and how not to end up personally footing the bill if Cousin Kevin turns up five years later.

A Final Thought

For something so certain, death causes an awful lot of uncertainty.
And as DNA testing becomes dinner-table conversation, the odds of long-lost relatives appearing after the event are only going up.

So if you’ve got elderly parents with “a will somewhere,” or your own documents stashed in a drawer marked “to sort later,” maybe it’s time to sort it now — while you can still remember which drawer it’s in.

Because dying without a plan doesn’t just leave a mess; it leaves an audience.

HMRC’s digital blitz is catching sloppy expense claims—get “wholly & exclusively” right, split mixed-use costs, keep records… or expect a costly nudge.

⚠️ Quick Heads-Up: HMRC’s new digital crackdown pulled in £27m last year by catching dodgy expense claims. They’re now going after sole traders, partners, and landlords who:

• Claim personal costs as business expenses
• Forget to split mixed-use costs properly
• Think “wholly and exclusively” is just a vague suggestion

Keep solid records, be consistent, and check before you claim — or risk a friendly letter from HMRC (and by “friendly” we mean “costly”).

Apparently, HMRC has decided to roll out a shiny new digital campaign after a trial last year netted them a casual £27 million. Yes, £27 million — presumably enough to fund at least three new IT systems that won’t work.

The trial revealed what they politely call “disallowable private use in business expenditure.” Translation: people claiming for things that weren’t entirely business-related. Think “conference in Marbella” that suspiciously coincided with your niece’s wedding, or claiming the cost of a new sofa because you once read emails on it.

Now, HMRC says it’s going to be opening more enquiries into sole traders, partners, and landlords to check that only genuine business expenses are claimed — and that any mixed-use costs are correctly split between business and personal use. This applies to the 2024/25 tax return you’ll be filing and, if they find anything questionable, earlier years too.

The Rules (a.k.a. What HMRC Will Throw at You)

Expenses have to be “wholly and exclusively” for business purposes to be allowed. Sounds simple enough, but as ever with HMRC, there’s a bit more to it:

• If part of a cost is genuinely for business, you can claim that part — but you’ll need records to back it up (e.g., mileage logs, not vague memories of “loads of meetings”).
• You’ve got to apply the same apportionment method each year (no creative accounting just because your new car drinks more petrol).
• If the cost is capital in nature (i.e., buying or improving something rather than just maintaining it), it’s not deductible — but you may be able to claim capital allowances instead.
• Capital allowances also have to be reduced for private use. So if your van doubles as a weekend camper for Glastonbury, expect an adjustment.
• Repairs to your premises? Fine — unless it’s actually an upgrade, in which case HMRC will want to have a word.

There is a “simplified expenses” option for vehicles, use of home, and private use of business premises — handy if you’d like to avoid the faff of receipts and spreadsheets.

Usual Suspects for Private Use Adjustments

Here are the areas where people most often fall foul:

• Travel & Subsistence: Your everyday lunch isn’t deductible just because you ate it at your desk. Meals and accommodation are allowable for certain travelling trades or when you’re working away from your normal base.
• Vehicle Costs: Driving from home to your regular place of work is not business travel. HMRC calls it “ordinary commuting,” we call it “rush hour hell.”
• Use of Home: Claims are usually based on the number of rooms or floor space used for business. Your kitchen doesn’t count just because you had a Zoom meeting while making tea.
• Entertaining: Generally, no. Not even if you bought the good biscuits.
• Training Costs: Refresher and CPD courses are fine, but learning an entirely new skill or qualification is a no-go. In HMRC’s eyes, that’s personal benefit, not a business cost.

Our Advice

When in doubt, assume HMRC will ask you to prove it — and that their idea of proof is more than “but my mate Dave says it’s fine.” Keep records, be consistent, and don’t assume that “everyone else does it” will hold up in an enquiry.

If you’re not sure whether an expense will pass the “wholly and exclusively” test, ask us. It’s much easier (and cheaper) to fix things before you submit a return than after HMRC has taken an interest.

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If it asks for money, passwords or your authentication code, it’s a scam — here’s what to do.

Scam emails, calls and letters pretending to be from Companies House are on the rise. They look convincing — logos, reference numbers, “urgent” language — but there are some easy tells and simple steps to keep your business safe.

Top red flags (real examples doing the rounds):

• Phone calls asking for: passwords, bank details, your authentication code, directors’ full dates of birth, or £5 to “put a hold on a late filing penalty.”
• Callers claiming to be from the “registration department” (it doesn’t exist) or from Companies House in Cardiff demanding immediate payment.
• Emails asking you to click links/attachments to: “verify identity (KYC/KYB)”, “avoid legal action”, “view an online filing rejection”, “download via e-Sign”, or “WebFiling account issues” (often from odd domains).
• Fake sender domains (not .gov.uk), e.g. @companies-house-gov.uk, @cpgov.uk, @companieshousel.ink, etc.
• Letters with QR codes or payment instructions for things like “Company Registration”, “Enhanced Web Filing Access”, “COHOREG” or requests from supposed prosecuting solicitors.

How to handle a suspicious contact (the quick script):

1. Stop. Don’t share info, don’t click links, don’t open attachments, don’t scan QR codes.
2. Check. Real emails come from .gov.uk. Hover links before clicking; if the URL looks off, bin it.
3. Verify. Ask for a callback number, then contact Companies House directly on 0303 1234 500.
4. Report. Forward dodgy emails to phishing@companieshouse.gov.uk and then delete them (including from “Deleted Items”).
5. Never pay fees from letters/emails unless you’ve independently confirmed on the official site.

Bookmark the official guidance (with live examples):

Reporting scams pretending to be from Companies House

Good hygiene going forward:

• Companies House will never ask for your authentication code or immediate payment by phone.
• Treat unexpected “complaints”, “identity checks” or “account problems” as suspicious until proven otherwise.
• Keep registered email inboxes monitored so genuine reminders don’t get missed among the noise.

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The Furnished Holiday Lettings (FHL) regime is gone. From 6 April 2025 (1 April for companies), short-stay lets are taxed like any other residential rental. The government’s policy and clarifications confirm four big shifts: interest relief capped at basic rate, no capital allowances on new spend (use “replacement of domestic items” instead), no CGT trader-style reliefs, and FHL profits no longer count as “relevant earnings” for pension contributions. 

Capital gains: goodbye 10% exits

Business Asset Disposal Relief (BADR), roll-over and hold-over reliefs no longer apply to disposals of FHL property made now. (There was a narrow transitional route for BADR where the FHL business ceased by 5 April 2025 and disposal follows within the normal window—facts and conditions apply.) Standard residential CGT rates apply: 18% (basic-rate) / 24% (higher/additional-rate). 

Income & expenses: back to standard property rules

• Mortgage interest/finance costs: now a 20% tax credit not a deduction. 
• Capital allowances: no new claims for furniture/fixtures. Instead use Replacement of Domestic Items Relief for like-for-like replacements. (Existing capital-allowances pools at 5 April 2025 can continue to be written down.) 
• Losses: pre-abolition FHL losses now fold into your UK or overseas property business and can be used there (subject to the usual continuation rules). 

Pensions: mind the “relevant earnings” trap

From 6 April 2025, FHL profits no longer count as “relevant UK earnings”. If you were using FHL income to justify personal pension contributions, check your capacity now (you may be limited to £3,600 gross if you have no other relevant earnings). 

Joint owners: default splits bite again

Post-abolition, income splits follow standard property rules. For spouses/civil partners, it’s 50:50 by default unless beneficial ownership is unequal and you file Form 17 so profits match that ownership. If you ran unequal splits pre-2025, make sure your paperwork still supports it. 

Business rates vs council tax (separate to FHL)

Local rating hasn’t changed because of the tax abolition. Whether you pay business rates or council tax still depends on availability/letting days (e.g., typically available 140 days and actually let 70 days in the prior 12 months for business rates England & Scotland). Check your local authority/VOA position. 

Quick actions we recommend

• Update forecasts for CGT and income tax (no BADR/roll-over; interest relief capped).
• Review pension planning if FHL profits previously propped up “relevant earnings”. 
• Tidy ownership docs (deeds/beneficial shares) and file Form 17 where needed. 
• Refresh your capex policy: use replacement-of-domestic-items relief and keep receipts. 

And for all landlords: MTD is coming up fast

From 6 April 2026, if your gross property/trading income (not your profit) is over £50,000, you must use Making Tax Digital for Income Tax; from 6 April 2027, the threshold drops to £30,000. (Government plans to legislate for £20,000 from 2028.) Using software now helps: live bank feeds, easy receipt capture, fewer typos, and ready-to-file quarterly updates when MTD kicks in. 

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Being an executor is a responsibility, not a title. Here’s the plain-English sequence most estates follow in England & Wales (Scotland/NI similar, with different terminology).

1. First 48 hours

• Locate the Will (and any Letter of Wishes). Confirm who the executors are.
• Register the death and obtain official certificates (order extras).
• Secure the home: lock up, switch off obvious hazards, note meter readings, remove perishables.
• Insurance: tell the home insurer the property is now unoccupied and arrange appropriate cover.

2. First 1–2 weeks

• Tell Us Once (government service) to notify DWP, DVLA, etc.
• Use the Death Notification Service for banks/building societies.
• Funeral: banks will usually pay the funeral invoice from the deceased’s account before probate.
• Redirect post; pause subscriptions; cancel cards/services.
• Make a master list of assets and debts (your loved one’s personal balance sheet makes this easy).

3. Valuations & the tax picture

• Get date-of-death valuations: property (RICS valuation recommended), investments, cash, business interests, valuables.
• Identify gifts in the last 7 years and any regular gifts out of income (records help to claim reliefs).
• Work out the inheritance tax position and how IHT will be paid (instalments may be available; interest applies if late).

4. Applying for probate (Grant of Probate / Letters of Administration)

• Complete the IHT reporting, then the probate application.
• Some small balances can be released without a Grant (each bank has a threshold), but property transfers and most investments will need the Grant.

5. Property sales — what you can do before the Grant

• You can market the property and agree a sale subject to Grant.
• Exchanging/Completing pre-Grant: in practice, most lenders and conveyancers won’t complete until the Grant is issued. A cash buyer might agree to complete pre-Grant with indemnity insurance and special contract terms, but:
  • the buyer usually can’t register title until the Grant is produced;
  • if a later Will/executor surfaces, there’s title risk;
  • insurers price in those risks.
• Bottom line: it’s legally possible in narrow cases, but not recommended. Best practice is wait for the Grant and exchange/complete then.

6. During the wait for the Grant

• You can accept offers and issue memoranda of sale; set expectations that completion waits for the Grant.
• Keep estate accounts: money in/out, valuations, expenses. Keep every invoice/receipt.

7. After the Grant is issued

• Collect assets and settle debts and taxes.
• Consider interim distributions if straightforward and cashflow allows (keep a prudent reserve).
• Property sale: check insurance, winterise if empty, keep utilities on low to prevent damage, keep buyers updated on timelines.
• Finalise estate accounts and distribute in line with the Will (or intestacy rules).

8. Deed of Variation — think before selling assets

• If beneficiaries may redirect inheritances (e.g., to children or charity), a Deed of Variation is often only fully effective for tax if done before the beneficiary sells or disposes of the asset.
• Selling first can limit tax “read-back” treatment. If a variation is on the cards, pause and get advice before exchange of contracts or encashing investments.

9. Red flags — call for help early if:

• There’s a business, overseas assets, trusts, or complicated gifts.
• Family tensions, potential claims, or missing beneficiaries.
• The house is tenanted or jointly owned in a way that conflicts with the Will.
• You suspect insolvency (debts may exceed assets) — don’t distribute without advice.

Handy extras:

• Council tax: many councils offer an exemption/discount on an empty property due to probate — ask.
• Vehicles: inform insurer and DVLA; keep insured until sold/transferred.
• Digital: use legacy contact tools where set up; otherwise contact platforms with the death certificate and proof of authority.

Costs & professional help

Most Wills give executors power to take professional advice (solicitor/accountant) and to pay reasonable costs from the estate. Don’t struggle alone — it’s usually more efficient (and safer) to get help.

What makes a good executor (quick reminder)

Organised, calm with paperwork, fair with family, and available. Pairing a family member with a professional can work well.

Practical tip: Keep a single estate file (digital or physical) with the Will, Grant, valuations, bank letters, tax forms and estate accounts.

Call to action: Unsure what to do first? Get advice before you act. Most Wills allow reasonable professional costs to be paid from the estate.

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Owning a business adds extra moving parts to your estate planning. The good news: there are generous reliefs. The bad news: they’re changing, and the legal paperwork inside your company often beats whatever your Will says.

1. BPR & APR: what’s changing (and what to watch)

• New allowances from April 2026 (draft law): a £1m “100% relief allowance” per individual for assets qualifying for 100% Business Property Relief (BPR) or Agricultural Property Relief (APR). Above that, relief drops to 50%.
• Shares on certain exchanges: BPR on some traded shares will reduce to 50%.
• Environmental land management: from April 2025, APR will extend to land in approved environmental schemes (conditions apply).
• IHT by instalments: the 10-year interest-free instalment option will extend to all BPR/APR-qualifying property, which helps with cashflow.

Takeaway: Relief isn’t “gone”, but the first £1m per person gets the full 100% — and value above that may only get 50% relief. Plan ownership and who inherits with that cap in mind.

2. Company documents vs your Will (the Will doesn’t always win)

• Pre-emption rights in the Articles or a shareholders’ agreement can force a deceased shareholder’s shares to be offered to the other owners first, before any transfer to a beneficiary is recognised.
• Other provisions include permitted transfers, compulsory transfers, or company buy-backs.

Practical tip: Your Will can say “leave my shares to X”, but if the company rules say otherwise, the company rules win. Always review Articles and shareholder agreements alongside your Will.

3. “Only director” risk: who can run the business tomorrow?

If you’re the sole director and you die, the company may grind to a halt. No one can operate bank accounts or sign contracts until probate — bad for staff, customers, and value.

What to do now:

• Appoint at least one additional director, or
• Update Articles so your personal representatives can appoint a director quickly.
• Review bank mandates and access to systems like payroll and accounting.

4. Cross-option & shareholder protection (funding the handover)

A cross-option agreement (often paired with life insurance) lets surviving owners buy the deceased’s shares at an agreed basis. The family gets cash, the business keeps control.

We can advise on the tax and legal consequences — your financial adviser handles the policies themselves.

5. Partnerships & LLPs: is the land actually a partnership asset (and will it stay protected)?

This is a frequent “gotcha”, especially in farming and professional practices.

• Land might be legally in one partner’s name but treated as a partnership asset under the deed.
• The partnership agreement, accounts treatment, minutes and any declarations of trust should all say the same thing. This affects reliefs and who inherits what.

The protection point: Without a properly written partnership agreement, assets you thought were ring-fenced for the trade may fall into your estate and be divided by your Will. If your Will leaves “everything equally to the four children” but only one farms, the others may demand their share of the land — forcing a sale and potentially ending the trade.

A clear partnership (or LLP) agreement keeps core assets inside the business, so active partners can carry on trading, while non-farming heirs can be provided for in other ways.

Why it matters even more now: Historically, assets owned personally but used by the business often only got 50% BPR. With the new £1m 100% allowance then 50% above coming in, aligning ownership could mean the difference between full and partial relief on substantial land and property values.

6. APR specifics for landowners

• From April 2025, land in environmental schemes may qualify for APR (subject to conditions).
• From April 2026, the £1m/50% split also bites here — so land values above the allowance may not get full relief.

7. Directors’ loans, property & group structures

• Directors’ loan accounts owed to you increase your estate’s value. Consider repayment strategies.
• Personally-owned property used by the company isn’t the same as property owned inside the company — different relief outcomes apply.
• Group structures: check which entity actually owns value (holdco vs opco) and ensure your Will lines up with your intentions.

8. Governance housekeeping that saves grief

• Keep the PSC register, share certificates, and cap table up to date.
• Store key contracts (leases, supplier agreements, customer SLAs) where a successor can find them.
• Leave a short “if I’m not here” guide — who to call (accountant, payroll, bank manager), where backups are, and how to access systems.

9. Reliefs recap (plain English)

• Today: many trading businesses and farming assets can achieve 100% relief.
• From April 2026: your first £1m of qualifying assets per person is at 100%; anything above may only get 50%. Certain listed shares will be capped at 50%. Instalment options will extend across the board.

Practical tip: Review three things together — your Will, your company/partnership paperwork, and your asset register. If they don’t line up, the legal documents usually win over your Will.

Call to action: Let us review your tax position under the new BPR/APR allowances, and check your business paperwork won’t undermine your Will. That way, you can keep the business (and its reliefs) in the right hands.

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Life insurance is one of those things we all know we “should” sort out, but it’s easy to kick into the long grass. The trouble is, if it’s done wrong (or not at all), it can leave families with debts, delays, and — ironically — an even bigger Inheritance Tax bill.

1. The basics (and the most common mistake)

• Life cover is designed to give your loved ones cash when you die — either to clear debts, replace income, or cover tax bills.
• The classic mistake: not writing the policy in trust.
  • If it’s in trust: the payout usually sits outside your estate. The trustees can access it quickly, without waiting for probate, and there’s no IHT.
  • If it’s not in trust: the payout swells your estate. That can tip you over the nil-rate band, create a tax bill, and hold things up until probate is granted.
• We’ve seen estates wait months for money that could have been released in days, just because no one ticked the “trust” box.

2. Mortgage cover ≠ life cover (and it can quietly lapse)

• Many people take out life cover with their mortgage. Years later, the mortgage is gone but the policy has been cancelled or reduced. The family assumes they’re covered — but they’re not.
• Even worse: some policies are tied directly to a specific mortgage. When you remortgage, the old policy is cancelled, and unless you take a new one, you’re suddenly uninsured.
• Practical point: Don’t assume “we sorted this when we bought the house” means you’re still covered. Check what’s actually in place.

3. Business owners: protection for more than the family

If you’re a business owner, life cover isn’t just about your family — it’s about your partners and staff too.

• Shareholder protection: Policies linked to cross-option agreements can fund buyouts, so your family gets cash and your co-owners keep control.
• Key person cover: If the business depends on you (or a colleague), insurance can give the company breathing space to hire and stabilise if someone dies unexpectedly.

Again, these policies only work properly if the agreements and trusts behind them are kept up to date.

4. “The wrong person gets the money” — nomination fails

Life insurance isn’t like pensions: the insurer pays out to whoever legally owns the policy, or the estate if no trust is in place. We’ve seen payouts accidentally land with an ex-spouse because the policy wasn’t updated after divorce. Not a great look at the funeral.

5. Cover vs reality (is it enough?)

• If your family would face a big IHT bill, is there enough cover to pay it without a fire sale of assets?
• If your mortgage is paid off, is the cover still necessary — or would the premiums be better redirected into other planning?
• If your policy is “decreasing term” (linked to a mortgage balance), does it still match your needs?

6. IHT safety nets — the joint life “just in case” policy

This is a practical option I often raise with clients in their early 50s who have built up a valuable IHT estate but aren’t ready to give assets away or give up the income they produce.

If a married couple has “everything to spouse” Wills, IHT is usually only due on the second death. That’s the point when a large tax bill can suddenly land.

An “IHT joint life second death” policy can be set up to cover the expected liability. In practice:

• For a fit, healthy couple, the premiums are often relatively low.
• The reality is, many of these policies never pay out — but they’re a safety net for the unexpected.
• This isn’t IHT planning (it doesn’t reduce the bill) — but it can buy peace of mind and time for longer-term planning.

7. Modern quirks

• Joint life policies: Often pay out on the first death, not the second — make sure you know which you’ve got.
• Critical illness add-ons: Useful, but they don’t cover everything. Don’t assume they’re a replacement for life cover.
• Old endowments: Some are worth keeping, others not — but don’t let them lapse unnoticed.

Practical tip: Dig out your life policies. Check: (1) is the cover still enough, (2) is it in trust, and (3) do the people named still match your wishes?

Call to action: We can’t tell you what policy to buy, but we can tell you whether your cover will sit inside or outside IHT, and whether it lines up with your wider estate plan. If it doesn’t, we’ll flag it so you and your adviser can fix it.

Back to You are not Immortal – a practical guide to a delicate topic – IHT

For years, pensions were the golden goose of estate planning — outside of Inheritance Tax (IHT), flexible, and easy to pass on. But the landscape is shifting, and it’s an area where myths and half-truths abound.

Where we are now (pre-2027):

• Before age 75: If you die before 75, most pension funds can be passed to beneficiaries tax-free.
• After age 75: Beneficiaries pay income tax at their marginal rate when they draw from the fund. But crucially, the pension pot itself has generally been outside IHT.
• Nominations matter: If you don’t nominate who should inherit, the scheme trustees decide. (Not always who you’d have chosen.)

Where we’re heading (April 2027):

• Draft legislation says most pensions will fall into the IHT net — meaning the value of your pension could be taxed at 40%.
• Importantly: the rules say the pension scheme itself can pay its share of the IHT bill directly. That helps with cashflow but doesn’t reduce the amount due. A £1m pension could still face a £400,000 IHT hit before beneficiaries see a penny.
• Different pensions may be treated differently. Defined contribution schemes (pots you build up) are likely to be caught. Some defined benefit (final salary) schemes may be treated differently, but the detail isn’t finalised.

When is a pension counted for IHT?

• Generally not counted (for now): most untouched defined contribution pensions with nominations in place.
• Already within scope: drawdown funds if transfers are made in ill-health, or where HMRC argues you retained control.
• From 2027: most uncrystallised defined contribution pensions are expected to be pulled into IHT.

The Halloween tale…

Mr. Smith, aged 76, has a £1m pension he’s never touched (he lives off other income). He assumes it’s the family nest egg. Sadly, he passes away.

Today’s rules:

The pension sits outside IHT. His children inherit the pot, taxable as income when they draw it. If they’re higher-rate taxpayers, they might pay 40–45% income tax as they withdraw — still painful, but at least spread out.

2027 rules:

The £1m is included in his estate for IHT. That’s a potential £400,000 IHT bill, which the pension scheme pays to HMRC before anyone inherits. The children still pay income tax when they draw the money. Double hit: IHT and income tax.

What this means for you:

• The legislation isn’t final yet — but planning ahead is essential.
• Pensions may no longer be the “last thing you spend.” In some cases, drawing on pensions earlier could save the family from a double tax charge.
• Updating nominations is critical. We’ve seen horror stories where an ex-spouse inherits because the nomination was never changed.

Practical tip: Review your pensions now. Understand whether they’re likely to fall within IHT from 2027, and how that interacts with your wider estate planning.

Call to action: Talk to us about the tax side of pensions and death benefits — we can flag the likely inheritance tax position, so you and your financial adviser can plan with eyes wide open.

Back to You are not Immortal – a practical guide to a delicate topic – IHT

From 6 April 2025, the UK moved IHT onto a residence-based footing. The key concept is long-term UK resident (LTR) — not “UK-domiciled”. If you’re an LTR, your worldwide assets can fall within UK IHT. If you’re not an LTR, it’s generally UK-situated assets only. 

Who counts as LTR?

You’re an LTR if you’ve been UK-resident for at least 10 of the previous 20 tax years (the normal statutory residence test applies). 

Leaving the UK? There’s an IHT “tail”.

If you stop being UK-resident, you stay within UK IHT for a period that depends on how long you were resident — from 3 up to 10 tax years (the full 10-year tail applies if you were resident for 20+ years). Example: resident 10–13 years → tail 3 years; resident 15 years → tail 5 years. 

What’s in scope under the new regime?

• LTRs: generally worldwide assets at death/chargeable events.
• Non-LTRs: generally UK-sited assets only (UK property, UK bank/investment accounts, etc.). UK-sited assets are within scope even if you live abroad. 

Trusts follow the status

Trust exposure now broadly tracks the settlor’s LTR status, with transitional rules for assets that were already non-UK and settled by non-doms before the change. This is a technical area — timing and situs matter. 

What this means in practice

• If you own property or portfolios overseas, assume they may be within UK IHT once you meet the 10/20 LTR test (and possibly for up to 10 years after you leave). 
• Double tax can bite where the other country has its own estate/inheritance tax — relief depends on treaties and situs rules. List foreign assets clearly on your personal balance sheet so executors can claim any reliefs correctly. 

Practical tip: Don’t rely on old “domicile” assumptions; check your residence history against the 10/20 test (and any post-exit tail).

Call to action: Ask us to map your residence status vs asset locations so you know what’s in and what’s out of UK IHT under the new rules — then your solicitor can align Wills/trusts accordingly.

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Giving to charity isn’t just about feeling good — it’s also one of the neatest ways to reduce Inheritance Tax.

How it works:

• Anything you leave to charity is free of IHT.
• If you leave 10% or more of your estate to charity, the IHT rate on the rest of your estate drops from 40% to 36%.

That small change can make a big difference — both to your chosen cause and your family.

Extra nuance: Some people prefer to leave a percentage (e.g. 5% of the estate) rather than a fixed sum. That way, the charity’s share rises and falls with the value of the estate, and you avoid awkward outcomes if the numbers change.

Practical tip: Think about causes close to your heart and how much you’d like them to benefit.

Call to action: Review your Will — a small gift can make a big impact.

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