Family wealth planning changed more between 2024 and 2026 than in the preceding decade. Domicile stopped mattering, offshore trust protections were repealed, business relief was capped at £2.5 million, and unused pension funds are being brought into the estate. Most plans written before 2024 are now built on at least one assumption that no longer holds.
Start with what broke
Four foundations of the old approach have gone.
Domicile. From 6 April 2025 UK residents are taxed on worldwide income and gains on the arising basis, and inheritance tax follows a residence test — a long-term UK resident being someone resident for at least 10 of the last 20 tax years. Leaving does not end it immediately: a tail of 3 to 10 years follows, scaled by how long you were here.
Offshore trusts. The income and gains protections for non-domiciled settlors were repealed. Worse for planning purposes, excluded property status is now retested at every chargeable event rather than fixed when assets were settled — so a trust that was outside the net can come inside it because the settlor's residence position changed.
Business and agricultural relief. For deaths on or after 6 April 2026, 100% relief is capped at £2.5 million of combined qualifying property, with the excess at 50%. The allowance is transferable between spouses, taking the combined figure to £5 million — but note that AIM and other unquoted shares now get 50% relief only and do not touch the 100% allowance at all.
Pensions. Unused funds and death benefits are being brought within the estate, with personal representatives liable. The pension was the single most effective estate planning asset under the old rules. It is not any more.
What still works
The unglamorous tools have survived, and they matter more now that the structural ones have gone.
- The spouse exemption and the transferable nil rate band, which is why the first death is usually the planning opportunity and the second is the liability;
- Lifetime gifting, with the seven-year clock and the annual exemptions — slow, but reliable and unaffected by any of the above;
- Normal expenditure out of income, the most under-used exemption available to a family with surplus income rather than surplus capital;
- Charitable giving, which reduces the estate and the rate where the 10% test is met;
- Trusts for control rather than for tax — a trust that manages when and how a beneficiary receives assets still does that job, whatever the tax position.
Where the wrappers sit now
ISAs are in the estate for inheritance tax. They never were a shelter from it. What they give a surviving spouse is the additional permitted subscription — an extra allowance equal to the deceased's ISA — which is an allowance, not a relief. And the account becomes a continuing account of a deceased investor, closing 3 years and 1 day after death if the estate has not been wound up. Our guide to ISAs and inheritance tax covers it.
AIM portfolios held for business relief now deliver 50%, not 100%. That halves the benefit for the same investment risk, and anyone holding one for estate planning reasons should re-run the arithmetic rather than assume the strategy still stands.
Family investment companies have become relatively more attractive, precisely because they are a governance and control structure rather than a relief. Corporation tax at 19% or 25% on retained profits, with the family's rights set out in the articles, is a different proposition from a trust — and it is unaffected by the non-dom and trust reforms.
Internationally mobile families
This is where the changes are sharpest. For someone arriving in the UK after at least ten consecutive non-resident years, the FIG regime gives four years in which designated foreign income and gains are not taxed here, whether or not brought onshore — at the cost of the personal allowance and the CGT annual exempt amount, and only on an annual claim.
Three points decide whether that is useful. The four-year clock runs consecutively from arrival and does not pause. The ten-year look-back is binary, and a single UK-resident year inside it resets the whole thing. And the allowance trade-off has to be run each year rather than decided once.
For pre-April-2025 offshore income and gains, the temporary repatriation facility is the route: 12% for 2026/27, rising to 15% for 2027/28 before closing on 5 April 2028. Designating now fixes the rate even if the money stays offshore — which makes this tax year the obvious point to deal with historic pools.
And for families leaving, the inheritance tax tail is the thing to map before booking the flights.
Trusts: still useful, more expensive
Where a trust holds UK assets, the running cost is now the main objection. A discretionary trust pays 45% on property income and 39.35% on dividends, trustees get no personal allowance at all, and the old £1,000 standard rate band was replaced in April 2024 by a £500 nil-income rule that taxes the whole income once exceeded. Trustee capital gains are at 24% with an annual exempt amount of £1,500.
None of that makes a trust wrong. It makes a trust something to choose for a reason — protecting a vulnerable beneficiary, controlling succession in a family business, keeping assets out of a divorce — rather than as a default tax structure.
What to do this year
Four things, in order of urgency.
Re-test the estate plan against the £2.5 million cap. A plan assuming unlimited business relief understates the liability, and the December 2025 increase from £1 million means much older advice may now be wrong in your favour too.
Revisit any pension left as an estate asset. The planning logic has inverted, and drawing rather than preserving may now be right.
Deal with pre-2025 offshore pools while the facility is at 12%.
Ask what each existing structure is for. Offshore trusts built for reasons that no longer exist are a cost without a benefit — though unwinding has its own consequences and should be modelled rather than assumed.
Acumon advises families through private client tax, inheritance tax planning, trust tax and succession planning, with family investment company structuring where control matters more than relief. If your plan was written before December 2025, the business relief figure in it is out of date — and that is the number worth checking first.