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The government has confirmed it will proceed with significant inheritance tax (IHT) reforms. These include bringing most unused pension funds into scope for IHT from April 2027 and introducing a new £1 million unquoted Business Relief (BR) allowance from April 2026. With the draft legislation now published, advisers have greater clarity but also a narrowing window to act.
This latest Octopus blog explores what these changes mean for estate planning and why now would be a good time to revisit your clients’ strategies. It also highlights the risk of inaction, with nearly a year of potential planning already lost. The government’s recognition of BR as a core estate planning tool presents a timely opportunity to integrate it more confidently into client conversations.
Importantly, the reforms could reshape the traditional role of pensions in estate planning. This makes it essential for advisers to reassess legacy plans and consider alternative tax-efficient solutions. With BR continuing to play a central role, advisers need the right tools and support to guide clients through this transition.
Octopus aim to help advisers navigate these changes with confidence offering insight, technical support, and estate planning solutions like the Octopus Inheritance Tax Service and OITSPlus, which both invest in unquoted companies expected to qualify for BR. OITSPlus is particularly suited to clients concerned about pension-related IHT exposure, offering faster mitigation and two-year insurance cover to protect eligible advised investors.
Read the full article >
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RISKS
- These are high-risk investments. The value of an investment, and any income from it, can fall as well as rise. Investors may not get back the full amount they invest.
- OITSPlus insurance cover only applies to eligible deaths. Ineligible deaths, or a misrepresentation in the health declaration could result in the insurer refusing to settle a claim under the insurance policy.
- Tax treatment depends on individual circumstances and tax rules could change in the future.
- Tax relief depends on portfolio companies maintaining their qualifying status.
- The shares of unquoted companies could fall or rise in value more than shares listed on the main market of the London Stock Exchange. They may also be harder to sell.
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Octopus investments are not suitable for everyone. Any recommendation should be based on a holistic review of your client's financial situation, objectives and needs. This communication does not constitute advice on investments, legal matters, taxation or any other matters. Personal opinions may change and should not be seen as advice or recommendation. CAM015168.
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