The nil-rate band has been frozen at £325,000 since 2009 and will stay frozen until 2030, while property, pensions and savings have continued to rise in value, which has pulled a larger number of ordinary estates into the 40% tax charge that was once a concern only for the very wealthy.

The changes were announced at the 2024 Budget by then Chancellor of the Exchequer Rachel Reeves. Unused pension funds will be brought within the scope of inheritance tax for the first time from April 2027.

She also introduced changes to business relief, one of the most widely used planning tools for family businesses, farms and unquoted trading companies, which is now capped at £2.5m per person, with relief on qualifying assets above that threshold cut from 100% to 50%

Wealth management firm Niche Private Clients has partnered with early-stage investment platform SyndicateRoom to publish a new free guide to help individual and families understand where they stand under the 2026/27 rules and the options available to them. The report is titled Inheritance Tax Planning: A structured approach to protecting family wealth.

One of the fastest-acting reliefs covered in the guide is Business Relief via the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS).

Where lifetime gifts generally require the donor to survive seven years to fall outside the estate, qualifying EIS and SEIS shares can achieve full Business Relief after just two years of ownership, provided the shares are still held at death, while the investor retains ownership of the capital rather than gifting it away outright.

The SEIS and EIS schemes together pull in around £1.9bn annually from private investors who benefit from the reliefs.

The expert at Niche predicted that SEIS and EIS investments could see new records in the coming years, driven by pending changes to inheritance tax relief on AIM portfolios and the reduction in venture capital trust income tax relief from 30% to 20%.

Aled Phillips, chartered financial planner at Niche, said: “Too many people chase the tax break before securing their own future. We suggest working the other way round: establish what you need to live well for life, including care and the unexpected, then plan with what’s left. Get that order right and the planning follows naturally, with clients acting with genuine clarity about the capacity they have.” 

Graham Schwikkard, chief executive at SyndicateRoom, said: “EIS has gone from a niche allowance to a mainstream estate-planning tool almost overnight. As AIM relief halves and pensions are pulled into the IHT net, EIS still delivers 100% Business Relief after just two years rather than seven. The discipline is to treat it as an investment first and a tax break second, which, for us, means diversifying widely enough to spread the risk.”