Chancellor Reins in Reform on Inheritance Tax as Record Monthly Receipts Close in on £1 Billion
Published byRod MacLean
The absence of further reform provides welcome certainty for high-net-worth individuals and families in Scotland, but changes already in the pipeline keep estate and succession planning firmly in focus.
The Chancellor’s decision not to make further major changes to inheritance tax (IHT) at this year’s UK Budget will provide some welcome certainty after months of speculation, while allowing individuals and families to focus on longer-term estate and succession planning.
It follows a period of significant change to the IHT regime, including reforms to domicile and long-term residence in 2025, restrictions to 100% relief for farms and businesses in 2026, and the planned extension of inheritance tax to unused pension funds and death benefits from April 2027.
Against that backdrop, the absence of further reform may come as little surprise given the record sums inheritance tax is already raising for the Exchequer.
HMRC collected a record £936 million in inheritance tax in September, up 39% on September 2025 and the highest monthly figure on record. Receipts reached £4.72 billion between April and September, around £300 million more than during the same period last year.
While further reform was not widely anticipated, attention had focused on whether the Chancellor might revisit areas such as lifetime gifting and the seven-year rule.
With no significant new measures announced, individuals and families across Scotland now have a more settled backdrop against which to consider how best to protect and pass on their wealth.
Our Private Client Partner, Rod MacLean, said: “John Healey may have limited further reform on inheritance tax, but high-net-worth individuals and families across Scotland shouldn’t be sitting comfortably just yet.
“Significant change is coming down the line, when unused pension funds and death benefits are brought within the scope of IHT from April of next year.
“Despite the speculation, it’s clear that, ultimately, the Chancellor may have seen little reason to tinker with a tax that is already delivering record receipts. With almost £1 billion collected in September alone and further changes already on the way, the absence of another round of reform will be welcomed by those who want some certainty to plan.
“That greater certainty is helpful because estate planning is a long-term process. The focus now returns to how best to protect and pass on wealth, while taking account of the changes affecting businesses and farms, and the pension reforms coming in April 2027.
“That can include looking at wills, property, investments, pensions and business interests. Of course, this all depends on individual circumstances and longer-term family goals.
“What this budget has brought, for now, is a period of greater certainty. This gives people a clearer backdrop against which to consider their options and make informed decisions about their wealth and succession plans.”
