Wealth planning in a changing tax landscape

Recent changes to Inheritance Tax (IHT) and Capital Gains Tax (CGT) and business succession reliefs have altered the planning landscape for many individuals and families. At the same time, HMRC continues to increase its focus on wealthy taxpayers, creating a need for robust, well-documented and regularly reviewed planning arrangements.

For many individuals and families, the key question is no longer whether planning has been undertaken, but whether existing arrangements continue to achieve the intended objectives in light of changing legislation.

Increased scrutiny of complex wealth affairs

There has been a significant increase in focus from HMRC on wealthy taxpayers in recent years. Their dedicated Wealthy Team oversees individuals with income which exceeds £200,000 or assets worth £2 million or more, using data analysis to identify possible compliance risks.

A report from HMRC highlights that the compliance yield which they collected from wealthy individuals increased from £2.2 billion in 2019/20 to £3.8 billion in 2025/26. This is reflective of a broader trend of HMRC investing more resources into reviewing complex tax affairs, and ensuring that taxpayers pay the correct amount of tax.

More estates are falling within scope

The impact of the IHT changes is already being felt, with the latest HMRC data showing that receipts have reached record levels of £8.5 billion for 2025/26, marking a fifth consecutive annual increase.

This reflects a combination of property price growth, frozen allowances and changes to the taxation of wealth, including the acceleration of some charges as people brought forward chargeable transactions in anticipation of further tax changes. As a result, families who may not previously have considered themselves exposed to IHT are increasingly finding themselves affected.

Against this backdrop, it’s important that individuals revisit their existing personal and business arrangements to understand whether recent tax changes, evolving family circumstances or growing asset values have altered their exposure. In turn, this increased activity is likely to increase the areas that come under HMRC's scrutiny.

Planning areas likely to come under greater scrutiny

As wealth structures become more complex and HMRC's compliance activity increases, certain transactions and arrangements may attract greater attention than others.

Lifetime gifting

Gifts made during an individual's lifetime, particularly those which qualify as gifts out of surplus income are an important estate planning tool, however, appropriate records should be kept and the interaction between gifts, exemptions and the seven-year rule should be understood.

Business and agricultural reliefs

Claims for valuable tax reliefs such as BPR and APR are often closely examined, making early planning especially important.

Valuations

HMRC may challenge values that materially affect tax liabilities for family businesses, investment portfolios and property holdings, regardless of whether assets are transferred, sold, or gifted.

Pension and estate planning

Pensions have historically been viewed as an efficient method for passing wealth between generations. However, with unused pension funds and certain death benefits expected to become subject to IHT from April 2027, pension planning can no longer be considered in isolation from wider estate and succession planning.

Documentation and evidence matter more than ever

In an environment of increased HMRC scrutiny, the quality of documentation supporting planning decisions can be as important as the planning itself. This is just as important for what may seem like routine transactions, such as lifetime gifts, as it is for complex planning, such as long-term estate planning.

Good documentation not only supports tax positions but can also help reduce the time, cost and uncertainty involved if HMRC decides to review an arrangement in the future.

Whether gifts are being made, trusts are being established or business reliefs are being claimed, maintaining clear records and supporting evidence can help reduce uncertainty and provide reassurance if questions arise in the future.

Why regular reviews are increasingly important

Wealth planning should not be viewed as a one-off exercise. Tax legislation, family circumstances and asset values can all change over time, meaning arrangements that were appropriate several years ago may no longer deliver the same outcomes today.

Regular reviews of planning strategies can help ensure that:

• Existing wills remain appropriate
• Estate plans reflect current legislation
• Pension plans are aligned with wider succession objectives
• Asset valuations are kept up to date
• Record keeping is accurate in case of any future HMRC enquiries

We’re here to help

Recent tax changes mean many individuals and families would benefit from revisiting existing wealth and succession plans. Whether you are considering lifetime gifting, reviewing estate planning arrangements or assessing the impact of future IHT changes, taking advice early can help provide greater certainty and flexibility.

Azets' private client tax and wealth management specialists can help you review existing arrangements, identify opportunities and ensure plans remain aligned with your objectives. The suitability and effectiveness of any planning strategy will depend on your individual circumstances and prevailing tax legislation.

Important information

• This communication is for general information only and does not constitute personal financial or tax advice. You should not act on the basis of this information alone.
• Tax rules affecting wealth, including pensions and related death benefit provisions, may change.