Is now the time for a Trust?

With the proposed changes to Agricultural Property Relief (APR) and Business Property Relief (BPR) from 6 April 2026, there may now be a place for a Trust as part of your estate planning.

There is a window of opportunity until 6 April 2026 to settle APR and BPR assets into Trust and this will not trigger an upfront IHT change as long as the settlor survives seven years. On or after 6 April 2026, if you place the same assets into Trust, there will be an upfront charge of 10% with a further 10% due if the settlor dies within seven years.

Trusts which hold APR and BPR assets will need to consider where the funds to meet an IHT charge will be held.  Trusts which are within the relevant property regime (where there is a tax charge every 10 years) cannot use life assurance as an option to provide these funds.  These  Trusts might need to be changed to enable the income to be used to pay the IHT charges to avoid having to sell property assets.

A Trust may also be a consideration for those who have been widowed since 30th October 2024 and who are widowed up to 6 April 2026.  Where the deceased had an interest in a farm or business this might want to be diverted away from the surviving spouse into a suitable trust to ‘bank’ the APR and BPR available.

Trusts can be complex and the purpose they were set up for may change over time. If you would like to review whether a  Trust is the right structure for you, or to review an existing  Trust, get in touch today.

Sarah  Astley is an  Associate Solicitor at Gullands Solicitors and can be reached at s.astley@gullands.com