October is the month things get real. The school run resumes in the dark. The heating goes back on. And on 28 October, the Chancellor will stand up and tell the country what is changing.
For anyone with an estate worth more than the nil-rate band, this is the most watched Budget in years. Pension changes are confirmed for April 2027. A social care levy has been rumoured and denied. And it all arrives just as families start thinking about the year ahead.
This month: what is actually confirmed for 28 October, why HMRC is writing to estates it thinks should have filed, what Dolly Parton’s estate can teach us about planning ahead, and five creative ways people have tried to avoid inheritance tax entirely.
October In Numbers
- 28 October: the date of the Autumn Budget
- £3.8 billion: inheritance tax collected between April and August 2026, up year on year
- 1 in 8: UK adults who aspire to pass down £500,000 or more through their will
- 67%: UK adults without a current, up-to-date will
- £4,522: average amount UK retirees give to family members each year
Reader Question
Every month, we pick one question submitted by a reader. If you have something you would like us to cover, send it to and it may be featured next month.
“My financial adviser has suggested I make some large gifts before the Budget, in case the rules change. Should I rush to do this before 28 October?”
Alistair, Leeds
Our Answer
Thank you, Alistair; it is a very sensible question. The instinct to act before a deadline is understandable, particularly when the stakes are high. But in this case, the short answer is: do not rush.
Budget speculation runs ahead of every Autumn Statement. Rumours include a 10% social care levy on estates and changes to capital gains tax. The government has denied the levy. Nothing else is confirmed.
Rushing large gifts before a Budget carries real risk. If the rules do not change, you may have given away assets unnecessarily, and the seven-year clock will already be running. If anti-avoidance measures are introduced with immediate effect, last-minute gifts may not be protected regardless. And a gift made in haste, without proper documentation, is harder to defend to HMRC later.
The changes already confirmed – pensions in the IHT net from April 2027 and the frozen nil-rate band until 2031- are the ones worth planning around now. Calm advice taken over several weeks is worth far more than a rushed transaction on 27 October. We are glad to help.
Budget Watch: What 28 October Could Mean
Chancellor John Healey delivers the Autumn Budget on 28 October. Estate planners are watching three things.
Confirmed. From 6 April 2027, unused pension funds become subject to inheritance tax for the first time. The ISA cash allowance falls from £20,000 to £12,000 for those under 65. Neither is subject to change on Budget day.
Speculated. A 10% social care levy replacing the current inheritance tax system has been widely discussed. The government denies it. Capital gains tax changes affecting property and business owners are also being discussed. Nothing is confirmed.
STEP’s warning. STEP has written to the Treasury identifying serious practical problems with the pension IHT proposals. Families will owe tax on pension assets before probate is granted, but cannot access those assets until after probate is obtained. STEP is asking for safeguards to prevent bereaved families from facing demands they cannot yet pay. Experts have also flagged that the proposals make no provision for lost or forgotten pensions, which are common. If a pension is discovered after estate administration is complete, the family could face a further unexpected tax demand. The GOV.UK technical note sets out the detail.
Whether or not the Budget announces anything new, the confirmed changes alone make this the most important planning window in a decade. Get in touch with us here.
HMRC Is Writing to Estates It Thinks Should Have Filed
HMRC has begun sending letters to families administering estates where it believes an IHT400 form should have been submitted but wasn’t.
The letters target estates near the main threshold levels: £325,000, £500,000, £650,000, £825,000 and £1,000,000. Many recipients had assumed their estate qualified as an “excepted estate” requiring no filing. The problem is that the residence nil-rate band and transferable allowances do not apply automatically. Claiming them requires the IHT400.
The consequences of not filing when required: a £200 fine after one year, a further £3,000 after two years, and interest at 7.75% per year on any tax owed. The form runs to 19 pages.
If you are administering an estate, or anticipate doing so, take professional advice on whether filing is required before the deadline passes. GOV.UK sets out the full requirements.
£1 Billion Lost: When Gifts Do Not Clear Seven Years
Analysis by NFU Mutual, obtained via a Freedom of Information request to HMRC and reported by MoneyWeek, found that more than 5,000 estates paid over £1 billion in inheritance tax on lifetime gifts in the four years to 2024. These were gifts made to reduce an estate, where the donor died within seven years.
In 2023-24 alone, 1,390 estates paid approximately £315 million on such gifts, averaging £226,000 per estate.
Gifting is effective. Timing matters as much as the amount. Gifts above the annual £3,000 exemption become potentially exempt transfers. Die within three years, and the full 40% rate applies. Between three and seven years, taper relief reduces the bill, but only on amounts above the nil-rate band.
Clear records of what was given, when, and to whom are essential. HMRC may ask. We are glad to help you structure this properly.
Dolly Parton Left $450 Million and No Drama. Here Is Why That Matters.
Dolly Parton died on 25 August 2026, aged 80. One of the most warmly regarded public figures of her generation, she gave away an estimated $600 million during her lifetime and leaves an estate of about $450 million with no known disputes, family feuds, or court applications. That outcome was no accident.
Her husband, Carl Dean, died in March 2025. After his death, she said publicly that she had “carefully reviewed” her entire estate plan. Years earlier she had said she had hired an estate attorney specifically so her death would not leave “the kind of mess that trails stars who die without a will.” Her assets passed into the DP Dean Trust, established well in advance, with clear instructions and named administrators. Her philanthropic programmes, including the Imagination Library, continue without interruption.
Parton’s estate was American and subject to US tax rules rather than UK inheritance tax. But the planning principle is the same: the earlier you put the structure in place, and the clearer you express your wishes, the less your family has to navigate at the worst possible time.
If you have not reviewed your estate plan since a significant life event, we would be glad to help.
The Gift Allowances Frozen Since 1981
Wedding gift exemptions have not changed since 1975. Parents can give £5,000 to a child getting married free of inheritance tax. In 1975, that covered more than half the average house price. Today, it covers less than 2%.
The annual gifting exemption has been fixed at £3,000 since 1981. The nil-rate band has been fixed at £325,000 since 2009. If the £3,000 annual exemption had kept pace with inflation, it would now stand at more than £12,000.
Families are planning with figures that bear less and less relation to the real value of what they own. One practical point: apply wedding gift exemptions before the wedding, not after. A gift given in the weeks following the ceremony does not qualify, even if clearly intended as a wedding gift.
Retirees Are Giving £4,500 a Year. Is the Timing Right?
Research by Quilter, analysed by the Centre for Economics and Business Research, found that UK retirees give an average of £4,522 per year to family members: £2,272 in direct gifts and £2,250 towards education. One sixth of all retiree spending goes to supporting younger generations. 60% worry about maintaining their own standard of living.
Nearly 40% say the pension IHT changes are influencing their timing. The desire to give while money is needed, rather than after death, reflects good instinct. The question is whether the giving is structured effectively.
Regular gifts from income, made consistently and documented, can qualify for the normal expenditure out of income exemption and sit entirely outside the IHT calculation. Larger lump sum gifts start the seven-year clock. Each has very different implications. With April 2027 now six months away, this is a good moment to take a fresh look. We are glad to help.
Five Creative Ways People Have Tried to Avoid Inheritance Tax
The history of inheritance tax is also, quietly, a history of people trying to get around it. Some approaches were inspired. Some were not.
1. Putting the house in the children’s names (and continuing to live in it). The most popular idea of the 1980s. It does not work. Under the Gift with Reservation of Benefit rules, if you continue to live in a property rent-free after giving it away, HMRC treats it as still in your estate. Thousands of families paid solicitors to arrange transfers that saved them nothing.
2. Buying a forest. This one works. Commercially managed woodland qualifies for 100% Business Property Relief after two years of ownership, passing entirely free of inheritance tax. It is entirely legal, entirely deliberate on Parliament’s part, and some very wealthy families have used it for exactly that purpose.
3. Rewriting the will after the funeral. A deed of variation allows a family to redirect a deceased person’s estate within two years of death, and HMRC treats the revised version as the original. Legislation specifically provides for it, it is completely legal, and it is one of the most underused tools in estate planning.
4. Lending money to the children with no intention of it coming back. Some families transferred wealth through “loans” that existed only on paper. HMRC has specific powers to look through artificial arrangements. In one case, a family lent £800,000 at 0% interest with no repayment schedule. HMRC treated it as a gift. The paperwork served as evidence. The full inheritance tax bill was upheld.
5. Leaving everything to a political party. Gifts to qualifying political parties are entirely exempt from inheritance tax with no upper limit. It is not a loophole; it is deliberate policy. It works. The obvious snag: you have to actually want to leave your money to a political party.
Your October Checklist
The Budget is on 28 October. Here is what is worth doing before it and after.
Before 28 October: review what is already confirmed, primarily the pension IHT changes from April 2027 and the frozen nil-rate band to 2031. Do not rush into gifts or trusts based on rumour.
After 28 October: take a week to understand any changes clearly before acting. Hasty responses to Budget day announcements rarely improve an estate plan.
In the meantime:
- Pension nominations: check they are current and reflect your intentions, regardless of what the Budget brings.
- Gifting records: if you have been making regular gifts, document them now. HMRC may ask.
- Your will: if it has not been reviewed in the last two years, or if your circumstances have changed, now is a good moment.
- Executor duties: if you are administering an estate, check whether an IHT400 is required before the deadline passes.
- The family conversation: the Budget is a natural prompt for a discussion many families put off.
If anything here has prompted a question, we would be glad to hear from you. Have a question for next month’s newsletter? Send it our way.