By Andy Wearing, January 2025

For many families, estate planning can feel like something that can always be revisited “later”. However, the year ahead presents a particularly important opportunity to review and, where appropriate, strengthen your plans.

With legislative changes due to take effect from April 2027 — particularly around pension death benefits and inheritance tax reliefs — 2026 offers a valuable window to ensure your arrangements remain fit for purpose. At Oak Four, we are encouraging clients to act early, rather than wait until changes are already in force.

Why This Matters Now

Two areas in particular are driving the need for proactive planning:

• Changes to the treatment of pension death benefits

• Ongoing reforms to inheritance tax (IHT) reliefs, including Agricultural Property Relief (APR) and Business Property Relief (BPR)

These developments don’t automatically require drastic action — but they do make it essential that key documents, such as Wills, pension nominations, and Letters of Wishes, are reviewed to ensure they still reflect both your intentions and the evolving tax landscape.

In many cases, these changes are acting as a useful prompt for families to revisit their wider estate plans and consider whether opportunities exist to improve tax efficiency and protect assets for future generations.

Reviewing Pension Death Benefits and Trust Planning

One area receiving increased attention is how pension benefits are passed on in the event of death.

With demand for succession planning expected to rise ahead of the 2027 changes, now is an ideal time to review both pension arrangements and estate planning structures. For some families, an Asset Preservation Trust can form part of this conversation.

When used appropriately, this type of trust can provide a structured way to receive pension or death-in-service benefits, helping to balance inheritance tax efficiency with longer-term family protection. It can also offer reassurance around how assets are controlled and ultimately distributed, particularly where bloodline protection or second-marriage considerations apply.

Keeping Wishes Letters Up to Date

Alongside formal legal documents, supporting paperwork such as Letters of Wishes plays an important role in ensuring your intentions are clearly understood.

In light of the April 2027 pension changes, updated wording may be appropriate for married clients to reflect different outcomes depending on the timing of death and whether a spouse survives. While pension providers retain discretion, clear guidance can help trustees make decisions aligned with your preferences and tax considerations.

This is not about adopting a one-size-fits-all solution, but about ensuring your documentation remains current, coherent, and aligned with both legislation and your family circumstances.

APR and BPR: Important Changes from April 2026

Another significant development comes into effect from 6 April 2026, with changes to Agricultural Property Relief and Business Property Relief.

The proposed cap on assets qualifying for 100% relief is increasing from £1 million to £2.5 million per person. Importantly, this allowance will be transferable between spouses or civil partners, meaning up to £5 million of qualifying agricultural or business assets could pass free of inheritance tax on second death.

There are also important considerations when trusts are involved. While trust relief allowances are also increasing, a trust created on second death will generally have only a single allowance for future ten-year charges. In some cases, planning earlier — such as using a business trust on first death — may help secure additional allowances and reduce longer-term inheritance tax exposure.

The Value of Acting Early

Taken together, these changes reinforce a familiar message: doing nothing is rarely a neutral decision.

Estate planning works best when it is proactive, considered, and reviewed regularly. Legislative change can create both risk and opportunity, and the families who benefit most are often those who take time to act before deadlines loom.

At Oak Four, we work closely with our clients to help them navigate these complexities with clarity and confidence — whether that means reviewing pension nominations, updating estate planning documents, or simply sense-checking whether existing arrangements remain appropriate.

If you would like to discuss how these upcoming changes may affect your own circumstances, we encourage you to speak with your Oak Four adviser.

Estate planning and tax rules are subject to change and depend on individual circumstances. Advice should always be tailored to your personal situation.