Many people will have been considering their New Year’s resolutions now that 2025 has begun. Most people, understandably, are eager to put their health and fitness first, but it’s also critical to consider the future and shield family members from known dangers. Making a will is a simple decision to carry out.
A November 2024 Will Aid study found that 56% of adults in the UK had no will at all, while 11% of people have an outdated will. Because inheritance tax laws have evolved, even if you have a valid will in place, its terms may not apply to your current circumstances or may no longer be as useful as they once were.
Protect your family and loved ones by making a Will
One of the most important things you can do to protect and provide for your family and loved ones, as well as to make sure that your assets are handled according to your intentions when you pass away, is to draft a will. Many people think that when they pass away, their closest relatives will inherit their fortune, but this isn’t always the case. A spouse or civil partner may not always be entitled to all of their deceased spouse or civil partner’s assets under Scottish intestacy laws (i.e., when someone passes away without a will). The situation for cohabiting couples can be even more complicated, with the surviving partner possibly having to file a lawsuit during an already trying time.
Changes to Inheritance Taxes legal right
Making a will is one way to prepare for the tax, and the October 2024 Budget made it even more crucial to think about getting guidance on inheritance tax (IHT).
According to HMRC, more and more estates are paying tax on gifts given by the deceased during their lifetime, more than doubling the tax taken between 2011 and 2021, as IHT allowances have stagnated in recent years. When it comes to IHT planning, timing is everything. While it’s never too late to seek help, it’s preferable to do so early on, when people can carry out plans effectively.
Since the government announced its plan to cap full Business and Agricultural Property Reliefs (APR and BPR) at £1 million starting in April 2026, the effects of the IHT changes on farmers, business owners, and pension fund contributors have been extensively chronicled. If the proposals become law, investors in the Alternative Investment Markets (AIM) who previously benefited from 100% exemption after two years will also be subject to an effective 20% tax penalty on these holdings. Naturally, that is still preferable to the typical 40%.
The Budget also affected pension savings because it proposed that, starting in April 2027, the majority of unused pension assets and death benefits will be included in the valuation of an individual’s estate for IHT. This is in addition to the cap on APR and BPR. These monies used to be included in a person’s taxable estate.
Get in Touch with our Private Client Solicitor on advice for IHT - UK and Scotland
Having a current will can help reduce your exposure to IHT because your solicitor can advise you on the best and most tax-efficient ways to transfer assets to your loved ones, making sure that your wishes are clearly stated and that any succession or IHT planning objectives can still be met. Make 2025 the year you take care of your loved ones and yourself completely, even though 2026 and 2027 may seem far off. In some respects, it feels like yesterday because we were thinking about resolutions for 2024.
Contact our team for legal advice. We are based in Glasgow, East Kilbride and Edinburgh and serve clients all over Scotland. We can help with power of attorney, estate planning, and executory. Get in contact with us by filling out our online enquiry form or call us on 0141 433 2626.
