I think we are approaching a real inflection point in the IHT and Estate Planning world. And by ‘approaching’ I mean, in the next 2/3 weeks – the end of September let’s say. The reason I say this is because the rumour mill is once again in full force ahead of the Budget.

The date has been set for the 26th of November. This feels like the Government are kicking the can down the road as far as they can get away with in some vein hope that the assorted scandals will have blown over by then and economic data might have improved – I suspect they could be disappointed on both counts.

The delay has even caused frustration among the Scottish Government as it seems that Scotland will not be unable to pass its Budget ahead of the Christmas break.

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Just when you thought it couldn’t get any worse, it does.

Hot on the heels of the Government’s response to the ‘IHT on Pensions’ consultation (which is still being debated and digested by the profession) we have media reports this week that Labour are actively considering yet more changes to the IHT regime!

The suggestion this time is that they could introduce a lifetime cap on gifting.

The former Labour Chancellor Roy Jenkins famously described Inheritance Tax as a “voluntary levy paid by those who distrust their heirs more than they dislike the Inland Revenue”.

Up until now that statement has been, for the most part, 100% true.

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It occurs to me that we are in somewhat of a No Mans Land at the moment.

The autumn budget bombshell is fading into the rear-view mirror although the impact of many of the measures is still not totally clear.

The changes to pensions death benefits are arguably the largest issue impacting on our Estate Planning and this is the area where there is perhaps still the greatest uncertainty.

The Budget announced the changes at a high level and then put the detail out to consultation. That consultation ended in January and the usual 3-month period for the Government to respond has already come and gone without so much as a mention.

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It occurs to me as we approach the Summer that we are in a period of high risk. No, I’m not talking about the stock markets or the economy. I am talking about the risk of losing momentum in the Estate Planning world.

We had the budget in the Autumn which was arguably the most impactful on our Estate Planning in a generation. Major measures were introduced that are pulling more and more people into the IHT space, while making existing IHT liabilities much worse in many cases.

Following announcements of this magnitude, it is natural to see a spike in activity and also a spike in impetus – people are more motivated to get things done to try and improve their position.

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Well, the Spring Statement this week was uneventful (from an Estate Planning perspective at least) and that is a good thing!

For one, it means that the Labour Government, in this tiny respect at least, do seem to have kept a promise – when they were elected they committed to holding just one major fiscal event a year and they have held true to their word… for now.

The Spring Statement really ran as it was intended – we got an economic update, some revised forecasts and the usual ‘book cooking’ to make the country’s finances meet the Government’s own self-imposed rules ‘by the end of the parliament’.

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One of my favourite adverts of all time was an airline billboard from several decades ago that read along the lines of

“If you don’t fly first class, your children will”

While of course it is very much in the airlines interest to sell first class tickets and they would very much like to see wealthy people spending their money doing so, there is a much deeper underlying message here.

It is no secret that the attitudes to spending and saving have changed as generations have passed, however I think there is much more to it than that.

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I have had a couple of interesting conversations with clients this week about what constitutes ‘fairness’ when distributing an estate.

This is a really subjective issue and one where I am not sure there is a single right or wrong answer.

The main area where this question arises is when distributing an estate between two or more children who may have enjoyed varying degrees of financial success in their own right. It could well be that one child has pursued a more lucrative career path than the other and so now finds themselves in a much more comfortable financial position than the other.

In this case, there are broadly 2 options available to the parents as we consider their estate planning:

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As 2025 gets underway and the mince pies and merriment fall into the rear view mirror, there seems to be a real momentum behind people’s Estate Planning. Don’t get me wrong, we always see a spike in Estate Planning activity at the start of each year as people make new year’s resolutions to ‘finally get around to it’.

2025 feels different – there seems to be a real acknowledgement that this might be the last chance to really make a difference before certain Estate Planning opportunities are curtailed or closed off altogether.

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It doesn’t seem that long ago that we were kicking off 2024 and here we are thinking about Christmas. Although we say the same thing every time, the years really do seem to be going by faster than ever and this is especially relevant for our Estate Planning.

2024 has been a year of huge change in this area. Of course we had the general election a few months back which returned Labour to power after a 14 year hiatus with the largest majority in living memory. Regardless of your overall political affiliations, it is probably fair to say that Labour is fairly hostile when it comes to Inheritance Tax policy.

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I am not sure how to describe the overall feeling in the office on what one colleague has described as ‘Budget Boxing Day’. In my 15 years in this profession, I have never known any financial or political event (Budget, Autumn Statement, Election etc) to cause this much rumour, speculation and in some cases, outright panic!

In one way yesterday was a huge relief – after a seemingly never-ending period between the election and the budget, we finally have some certainly about the future direction of travel for tax policy. Unfortunately, that is where the good news ends really.

Before I get into the detail, I would like to put on record my thanks to the Buckingham Gate team who have worked tirelessly over the past 3 months or so to get planning solutions in place for clients ahead of the budget day – I have never seen such dedication and determination and I am very grateful for all of their efforts!

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