IHT News: March 2026 Roundup
With the APR/BPR reform just days away from taking effect, March 2026 is a pivotal month for inheritance tax planning. Here is what is happening, what has changed, and what you need to prepare for.
March 2026 — Key Dates
APR/BPR Reform: Final Countdown
The biggest change to inheritance tax in years takes effect on 6 April 2026. The APR/BPR reform introduces a £2.5 million per person cap on the combined value of agricultural property relief and business property relief. Above this cap, only 50% relief applies instead of 100%.
For most estate owners, the practical implications are:
- Farms under £2.5M: No change — 100% APR continues to apply
- Farms over £2.5M: The excess faces an effective 20% IHT rate (50% relief, then 40% tax on the remaining half)
- Business owners: Same cap applies to BPR qualifying assets
- AIM investors: AIM shares receive only 50% BPR from April (effectively a 20% IHT rate on the full value)
March is the last opportunity to review estate plans that rely on full APR or BPR relief. Anyone with qualifying assets above £2.5 million should be speaking to their adviser now.
Pension IHT: 2027 Timeline Confirmed
The government has confirmed that unspent defined contribution pension pots will be brought into the inheritance tax net from 6 April 2027. This was first announced in the Autumn Budget 2024 and draft legislation is expected later in 2026.
Key points confirmed so far:
- Defined contribution (DC) pensions — including SIPPs, personal pensions, and workplace DC schemes — will be included in the taxable estate
- Defined benefit (DB) pensions are generally excluded (though lump sum death benefits may be caught)
- The pension administrator, not the executor, will be responsible for paying the IHT attributable to the pension
- Interaction with the RNRB taper is a major concern — a pension pot could push an estate above £2 million and trigger loss of the residence nil-rate band
Read our detailed guide on pensions and IHT from April 2027 for worked examples showing the impact.
HMRC Receipts Update
IHT receipts continue to rise. Frozen thresholds combined with rising property prices and asset values mean more estates are crossing the IHT threshold each year. The number of estates paying IHT has roughly doubled over the past decade.
The trend is set to accelerate from April 2026 (reduced APR/BPR relief) and April 2027 (pensions in estate). The Office for Budget Responsibility projects IHT receipts will continue growing through the rest of the decade.
What Is Coming in April 2026
Here is a summary of what changes on 6 April 2026 and what stays the same:
- Changes: APR/BPR cap at £2.5M per person, AIM shares BPR halved to 50%, new reporting requirements for large APR/BPR claims
- No change: NRB (£325,000), RNRB (£175,000), IHT rate (40%), spouse exemption, charity exemption, seven-year rule, gifting exemptions
- Coming later: Pensions in estate (April 2027)
Planning tip: If you have not reviewed your estate plan since the Budget 2024 announcements, now is the time. The combination of frozen thresholds, reduced reliefs, and pension inclusion means many families will face higher IHT bills than they expect.
Frequently Asked Questions
When do the APR/BPR changes come into effect?
The APR/BPR reform takes effect from 6 April 2026. From that date, the combined APR and BPR allowance is capped at £2.5 million per person, with only 50% relief on qualifying assets above this cap. AIM shares receive 50% relief only (down from 100%).
When will pensions be included in estates for IHT?
Unspent defined contribution pension pots will be included in the taxable estate from 6 April 2027. The government confirmed this timeline in early 2026, with draft legislation expected later in 2026. Defined benefit pensions are generally not affected.
Are inheritance tax thresholds changing in 2026?
No. The nil-rate band remains frozen at £325,000 and the residence nil-rate band at £175,000. Both are frozen until at least April 2030. With property prices and asset values rising, more estates are being pulled into the IHT net each year.
How much IHT did HMRC collect in the latest figures?
HMRC IHT receipts have been steadily rising, driven by frozen thresholds and rising asset values. The latest published figures show annual receipts exceeding £7 billion. Check HMRC's monthly tax receipts publication for the most current data.
Check Your Estate's IHT Under the New Rules
Estate Map's calculator already includes the April 2026 APR/BPR cap. See exactly how the changes affect your estate — and explore planning options.
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