Why now is a crucial moment for estate planning — and how Generation Financial Planning can help

Today’s Autumn Budget 2025 delivered by the Chancellor focused largely on stabilising the economy, increasing taxes on investment income, and extending various freezes. While the Budget did not make dramatic changes to Inheritance Tax (IHT) itself, the freeze in thresholds combined with rising asset values means more families than ever will be drawn into the IHT net.

For clients of Generation Financial Planning, this Budget should serve as a reminder to review wills, gifting strategies, and long-term estate planning — especially as wider potential reforms remain under active consultation.

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✅ What Today’s Budget Means for Estate & Inheritance Planning

Although IHT rules were left unchanged today, several decisions have indirect but significant consequences for people building or passing on wealth.

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1️⃣ Threshold freezes increase future IHT exposure

The Chancellor extended freezes on a range of tax thresholds. While IHT allowances (NRB & RNRB) were not explicitly touched today, the freeze elsewhere reinforces the reality of fiscal drag:

• Salaries rise but allowances do not

• Property prices continue to grow

• Investment values compound over time

This means more estates will exceed the £325,000 nil-rate band and the enhanced £500,000 allowance available when passing a home to direct descendants.

👉 How Generation Financial Planning helps:
We provide detailed IHT exposure calculations and strategic planning to ensure allowances are used effectively within a client’s will, trust arrangements, and estate structure.

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2️⃣ Higher taxes on savings and investment income affect how estates grow

The Budget confirmed increased taxation on:

• Dividend income

• Rental income

• Savings income

This reduces after-tax returns on portfolios many people intend to pass to future generations.

👉 Where Generation Financial Planning supports clients:
We help clients reassess asset structures, explore family trusts, and consider long-term strategies that maintain tax efficiency despite higher taxes.

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3️⃣ Reduced ISA allowances drive interest in alternative estate-planning solutions

Lower ISA limits (particularly for under-65s) will push more people to consider:

• Trust planning

• Lifetime gifting

• Pension-based strategies

• Tax-efficient will structuring

👉 Our role:
Generation Financial Planning helps clients model the impact of these changes and integrate them into a robust estate or intergenerational wealth plan.

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🔄 Why the Previous Budget Cycle Still Matters — and Could Have Larger IHT Implications

While today’s Budget avoided sweeping changes to IHT, earlier policy papers and government consultations are still in motion — and these could reshape estate planning in the next few years.

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🔸 Potential changes to the 7-year gifting rule

The Treasury has previously discussed:

• Reforming or replacing the 7-year rule

• Introducing a lifetime cap on tax-free gifting

• Limiting or removing taper relief

These are not law yet, but the direction of travel is clear: the government is looking at ways to close perceived loopholes in wealth transfer.

👉 How we help:
Generation Financial Planning reviews gifting strategies, ensuring clients act while allowances still exist and structures remain advantageous.

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🔸 Business Property Relief (BPR) & Agricultural Relief (APR) under scrutiny

Earlier this year, consultations suggested:

• Possible caps on relief

• Complexity changes

• Stricter qualification criteria

If implemented, these changes could significantly impact estates containing:

• Family businesses

• Farms

• Business assets

• Shares qualifying for BPR

👉 Our specialist support:
Generation Financial Planning works with business owners to evaluate exposure and plan succession effectively.

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🔸 Pension death benefits may become taxable in future

Consultations continue into whether pension wealth should be included in the IHT calculation from 2027.

👉 Why this matters:
Many people use pensions as a tax-efficient inheritance tool — that strategy may soon need revisiting.

Generation Financial Planning can model how future rule changes may affect beneficiaries and help restructure plans accordingly.

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🧩 How Generation Financial Planning Supports Clients After This Budget

✔ Updating wills and trust documents to reflect today’s tax environment
✔ Reviewing projected IHT exposure under frozen thresholds
✔ Designing efficient lifetime gifting strategies before any rule changes
✔ Succession planning for business and agricultural clients
✔ Reviewing pension beneficiaries in light of possible upcoming reforms
✔ Ensuring assets pass to the right people, in the right way, with minimal tax

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🗞 Conclusion: Today’s Budget Was Quiet — but the Estate Planning Landscape Is Not

While today’s Budget did not overhaul Inheritance Tax directly, the combination of:

• threshold freezes

• rising investment & property values

• increased taxes on income streams

• and major reforms still on the horizon

means that proactive estate planning is becoming essential rather than optional.

Clients of Generation Financial Planning can be confident that we continue to monitor reforms closely and provide expert guidance to ensure their wills, estates and family wealth remain protected — today, and in the years ahead.