The latest Autumn Budget announcement brought some major changes to inheritance tax, business and agricultural reliefs and, with the introduction of a High Value Council Tax Surcharge, many families are rethinking their estate plans.
To clarify what these shifts mean for Gloucestershire homeowners, SoGlos spoke with Caroline Farmer, head of the private client department at Hughes Paddison, to find out more about the key actions individuals should take now to protect their wealth for the future – and how the Hughes Paddison team can help.
Can you explain the types of services the Hughes Paddison private client team offers?
Hughes Paddison does have a very experienced team of solicitors and chartered legal executives who are here to provide clients with advice and assistance.
This can cover a variety of services, such as the preparation of Wills and Lasting Powers of Attorney, as well as advising attorneys or deputies.
We can assist with Court of Protection applications, give advice on estate planning, tax planning, trust planning, alongside helping with the initial creation of those trusts.
We also provide expert advice and assistance to the executors and trustees, too.
What do you feel distinguishes Hughes Paddison's approach to private client work, especially when helping families navigate complex estate or tax planning issues?
Our team prides itself on providing bespoke advice to our clients and always striving to collaborate with them (and their other advisers) to achieve the best outcome.
This means taking time and care to understand our clients’ objectives and ensure that we provide advice that will enable them to make informed decisions, whether that is to create Wills or trusts or to provide assistance with the administration of an estate and the types of matters that will arise during that process.
We strive to be approachable, supportive and available, and to always provide clear advice.
The private client team members get a lot of satisfaction from their work and we hope that this shows in our interactions with our clients and other professionals.
Has the recent Autumn Budget introduced any new triggers that mean clients should revisit their estate planning sooner rather than later?
As a general rule, we would recommend that Wills are reviewed every five to 10 years.
However, changes to the inheritance tax rules – such as the significant changes we saw in the 2024 Autumn Budget – do mean that clients should take advice on the suitability of their Wills and their succession plans more regularly than this.
It is still surprising to learn how many people have never made a Will and are risking leaving a very difficult situation for their loved ones to sort out – so we would always recommend planning for the worst whilst hoping for the best!
For wealthier clients, it is often prudent to also involve their accountant or financial adviser in order to give full consideration to their business interests, pensions or other investments and to bring the different strands of advice together in an overall plan.
The 2024 Autumn Budget introduced significant changes for the inheritance taxation of business and agricultural assets, as well as unused private pensions, which start to take effect from April 2026.
Clients with business or agricultural assets should urgently take advice about their succession plans for these assets in case there are tax planning steps that they want to complete prior to 6 April 2026.
That sounds like a while away but it will be here before you know it, so please don’t delay.
The chancellor announced that £1 million inheritance tax allowance can now be transferred between spouses. How will this affect the way families consider planning their estates and structuring their wills?
This change to the £1 million allowance for business and agricultural assets is extremely welcome.
Couples who have not formalised their relationship might want to consider the benefits of getting married or becoming civil partners in order to take advantage of the ability to transfer assets to each other – or in trust for each other – on a tax-free basis and to transfer allowances as well.
Ideally all clients should still prioritise taking advice now on their options for structuring their Wills and forming an overall succession plan for their wealth.
With the new 'mansion tax' being introduced, what should owners of large rural homes or estates in Gloucestershire consider when it comes to inheritance planning? Could this affect how assets are gifted or passed down?
We're still waiting to see what the precise rules will be for the High Value Council Tax Surcharge (HVCTS) on properties in England valued over £2 million, and whether and when this will continue to be payable after the homeowner has died during the estate administration period.
The HVCTS is not due to come into effect until April 2028 and so presumably the government will have a lot of work to do before then in order to identify which properties will be caught by it.
It's understood that the HVCTS will be based on a property’s value in April 2026 and will be revalued every 5 years. It will be an annual charge collected by your local authority along with Council Tax but paid over to central government. We also await further details on how the HVCTS might accrue as a debt of an estate for homeowners who cannot afford to pay this charge as it falls due.
The introduction of the HVCTS and inheritance taxation of unused private pensions (with effect from April 2027) will place a higher burden on executors to ensure that the estate’s liabilities are identified and settled in full.
Failure to do so could lead to personal liability for executors. Hughes Paddison is here to help executors understand their duties and help them through this estate administration process.
The HVCTS, together with inheritance tax, are levies on an estate that will reduce what is left for the next generation.
Clients might therefore want to take specialist advice on the possibility of, and the tax consequences of, passing on wealth in their lifetime, as this can be more complicated when considering a person’s own home due to rules regarding reservation of benefit.
As a private client specialist, what would be your key piece of advice to Gloucestershire homeowners and families who are concerned about inheritance tax following the Autumn Budget?
The inheritance tax allowances are fixed until April 2031 and so, if property prices continue to rise, this will bring more estates into the realms of having to pay inheritance tax.
Firstly, I would recommend taking advice to understand what your current exposure is to inheritance tax, then ensure that your Wills are up to date and in the best form for your estate planning objectives. This may lead to discussions regarding lifetime gifting and the use of trusts.
As a matter of course, we will always recommend that all clients make and register Lasting Powers of Attorney at the same time as reviewing their Will arrangements.
Permanent loss of capacity can happen without warning, so having arrangements in place ahead of time will ensure that your important affairs are managed by people you truly trust.
