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3. Those set up after the new rules are in place from 6 April 2026 Any Trust set up from 6 April, will be governed by the new legislation. This means that on settling any qualifying assets into Trust, the 100% BPR or APR will only be available on up to £1 million. Any value in excess of this will be subject to an immediate IHT charge, albeit benefitting from 50% relief. Additionally, if any Trusts have previously been set up by the settlor then this will reduce the allowance available.
10 Year anniversary and exit charges Certain trusts are subject to 10-year anniversary charges so it’s important to consider how the new rules will impact these too. For example, those holding Agricultural property, which may generate low returns, could be left with cash flow issues when they need to fund a potential liability, but the value exceeds the allowance available to the trust.
circumstances along with those of any Trusts in place means that each situation really is unique.
It’s vital to seek advice to understand your current position, your future potential liabilities and any opportunities to maximise the relief available. So, whether you already have a Trust in place or you’re considering one for the future, get in contact with Sam or one of our team by calling 0330 058 6559 or email hello@scruttonbland. co.uk to discuss what could work best for you.
In summary these rules are complex, with many pitfalls and a wide range of implications.
Trusts have always been an excellent tool to protect assets whilst allowing Trustees to retain an element of control. But with the changes to reliefs, they could become an even more readily utilised tool to help mitigate IHT, especially with the April 2026 changes. As ever, there are a number of considerations, aside from tax, that need to be taken in to account before creating a Trust, so a full review of the position will be needed. For example, Trusts may be wound up to simplify matters and if they’ve served their purposes - such as beneficiaries reaching an appropriate age - careful consideration is needed to avoid losing any further potential benefits.
Importantly, the relief is up to £1 million but is capped at the value transferred into the Trust.
So, if £250,000 worth of Agricultural Land is transferred into Trust the allowance will be £250,000 even if the asset doubles in value. Whilst the relief available is reduced, the potential to utilise a further £1million allowance does offer an IHT planning opportunity.
Sam Mudd Senior Tax Adviser samantha.mudd@scruttonbland.co.uk 01206 417269
PRIVATE CLIENT | SCRUTTON BLAND | 1 1
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