Standard Life ramps up inheritance tax planning advice amid sweeping Budget changes
Standard Life is significantly expanding its inheritance tax planning advice services as customers grapple with major Budget changes set to reshape estate planning across the UK.
The financial services provider is responding to surging demand for guidance following government reforms that will fundamentally alter how inheritance tax applies to pensions, agricultural property and family businesses from April 2026 onwards.
The changes come as inheritance tax receipts continue their upward trajectory, with HMRC collecting £7.1 billion in the first ten months of the 2025/26 financial year, an increase of £130 million compared with the same period the previous year. The Office for Budget Responsibility forecasts receipts will reach £8.7 billion this year, climbing to more than £14 billion by the end of the decade.
Major reliefs capped from April 2026
From 6 April 2026, Agricultural Property Relief and Business Property Relief will be capped at £2.5 million per individual. Amounts above this threshold will qualify for only 50% relief instead of the previous 100%, creating an effective 20% tax rate on excess value. The allowance is transferable between spouses and civil partners, giving married couples a combined relief of up to £5 million.
The £2.5 million cap represents a significant increase from the original Budget proposal announced in October 2024, which set the limit at £1 million per person. Following feedback, the government raised the threshold through an announcement on 23 December 2025, though the change still represents a substantial shift for family-owned farms and businesses previously enjoying unlimited relief.
Pensions brought into estates
A further major change takes effect from 6 April 2027, when unused pension funds and death benefits will be brought into a person's estate for inheritance tax purposes. This reform ends the long-standing exemption that made pensions an attractive vehicle for passing wealth to the next generation tax-free.
Government estimates suggest approximately 10,500 estates, around 1.5% of total UK deaths, will become liable for inheritance tax due to the pension changes where this would not previously have been the case.
Frozen thresholds compound the pressure
The inheritance tax burden is being amplified by frozen thresholds. The nil-rate band has remained unchanged at £325,000 per person since April 2009 and is set to stay frozen until at least April 2030. The standard inheritance tax rate of 40% applies to estates above this threshold.
An additional residence nil-rate band of £175,000 is available when a main residence passes to direct descendants such as children or grandchildren, potentially raising the total threshold to £500,000 for individuals or £1 million for married couples. However, these allowances have also been frozen, meaning inflation and rising property values continue pulling more estates into the tax net.
Standard Life's expansion of planning advice comes as financial advisers across the sector report heightened client concern about the upcoming changes. With major reforms scheduled for both April 2026 and April 2027, families with significant pension wealth, property holdings or business assets face a narrowing window to review their estate planning arrangements.
