Citywealth Quick Insight Series on Tax Trends – Ian Dyall, Evelyn Partners

Date: 12 Nov 2025

Karen Jones

This week’s Tax Trends is dedicated to Ian Dyall, Head of Estate Planning at wealth management firm Evelyn Partners.

How would you summarise the current tax environment for UHNW individuals and families in the UK?

The changes announced in the last budget mean that amendments to planning are likely to be required in their planning, but as with any changes, once you know what the rules are there are always steps that you can take to mitigate their impacts.

The challenge at present is that there are still some unknowns in the changes that have been announced, and there are probably further changes still to come.

For UHNW individuals the important thing is not to be too hasty in taking irreversible actions based on speculation before we have more concrete details.  There are some actions they should be taking now, but it is important to retain flexibility in their planning.

How is succession and estate planning being impacted by new inheritance, wealth, or exit tax proposals?

Prior to the budget we had been recommending people preserve their pensions and use other assets to fund their retirement, using their pension as a means of passing on wealth.  In many cases people now need to look at tax efficient ways to draw their pension and gift any excess funds during their lifetime.

The changes to business and agricultural relief mean that people need to review how their business and agricultural assets are owned and often make changes to who they leave those assets to in their wills.

We’ve also seen a significant increase in interest in using protection policies to pay inheritance tax liabilities both on the estate and on lifetime gifts.

Frankly, it has brought the need for advice into sharp focus.

Which recent UK tax policy change has had the most significant implications for estate planning?

The change that affects most people is the inclusion of pensions in the estate for inheritance tax purposes from 2027.  However, for the individuals affected by it, the agricultural relief and business relief changes can have the biggest financial impact on the individual.  One of our clients will have a £35m increase in their inheritance tax liability without further planning.

How are advisers helping clients prepare for these challenges?

Good advisers will be proactively contacting their clients to assess how their plans need to change.

It is also far more important now that clients plan early and look holistically at their family’s financial position.  For example, the income tax position of their beneficiaries will be very relevant when looking at whether to start withdrawing and gifting their pension or whether to retain it.

Many people will also need to change how assets are owned and make amendments to their wills, so working with other professionals is vital.

What is the question you get asked the most by clients?

“Can’t I just give my house to my kids now and continue living there?” or “Do you think they will get rid of tax free cash on pensions?”

One of the most important roles of advisers is to help their clients see through the unhelpful speculation and avoid taking knee jerk actions.

We had a number of clients shortly after the last budget asking us if they can put their tax free cash back into their pension as they had taken matters into their own hands and withdrawn the cash.  Unfortunately, that decision is irreversible.

How are clients adjusting their estates in light of all the recent changes?

We have seen a number of clients moving from AIM portfolios into non-AIM BR qualifying portfolios, or splitting their BR qualifying investments between spouses.  However, if their will leaves everything to each other then those changes may be pointless, so it’s really important to see the client’s wills.

Clients are already taking action on their pensions, extracting tax free cash and gifting it, or making regular gifts from their pensions using the normal expenditure exemption.

Interestingly, the increased focus on intergenerational planning has led to clients taking steps to mitigate tax on assets that weren’t affected by the budget, with significant sums being transferred into trusts, so the changes may not generate the tax that the chancellor was hoping for.

What curveballs could the Autumn Budget throw up for estate planning?

From an inheritance tax perspective, I wouldn’t be surprised to see the normal expenditure from income exemption, limited or eliminated completely.  I think they’d need to make some form of exception for life policy premiums if they did that, otherwise it would cause significant issues.

If the government want to get more adventurous, they might look at a cap on lifetime gifting, or if they want to get really creative they could look at replacing inheritance tax altogether, but I think the latter is less likely in this budget, as there are bigger fish to fry.

You can’t generate much revenue from making even large changes to IHT and CGT, Inheritance tax represents less than 1% of UK tax revenue and CGT less than 2%, so it wouldn’t surprise me to see the Chancellor forced to break her manifesto promises.  Income tax, National insurance, VAT and company taxes account for two thirds of the total tax received by the government.  If the Chancellor really does need more tax revenue, then she’ll need to look there despite the manifesto promises.

What role do tax-efficient investments play in your clients’ strategies, and are these evolving?

They are useful investments for many of our wealthier clients, but they require thorough due diligence before investing, and as with any other investment, people should avoid putting all their eggs in one basket.

The changes to Business Relief mean that in most cases assets should be held individually, rather than jointly between spouses, and consideration needs to be given to who they are left to on death.  That may mean making changes to existing investments.

What is the one thing you would encourage all UHNW clients to do now?

I’d like clients to think much earlier about exactly how much money they need, whether they really need the control they say they do over assets they give away and be prepared to make large outright gifts earlier in life.

We are still in a position where you can make an outright gift of any size and provided you live for seven years there will be no inheritance tax.  Many people are keen to control their wealth well into their 80s or even 90s and end up paying inheritance tax unnecessarily.  Ultimately, it’s their money and their choice, but they need to understand that trying to control their assets for too long is likely to result in paying more tax.

Looking forward, what are your top predictions or concerns about the future direction of UK tax policy for UHNW clients over the next 12–24 months?

UHNW clients in many cases are pretty mobile.  Many already have properties in other countries.  There is a limit to how far to can push them before an increase in tax leads to a reduction in overall revenue.

I don’t think there will be a wealth tax, despite the speculation.  They are notoriously hard to implement and most countries who have tried it have since backtracked.  In the 1970s Callaghan’s Labour government had a mandate to introduce a wealth tax but the Chancellor, Dennis Healey, abandoned the idea in 1975.  He later said “… in five years I found it impossible to draft one which would yield enough revenue to be worth the administrative cost and political hassle”.

I think that there is a possibility that IHT may be replaced by some form of tax on gifts received during life and on death, payable by the recipient once the total received exceeds a certain figure.  This was the conclusion of a Resolution Foundation report in 2018, when Torsten Bell, was its Chief Executive.  Torsten Bell is now a Labour MP and was named as the 10th most powerful left-wing figure in the UK by the New Statesmen.  Two years later the All Party Parliamentary Group reached a similar conclusion.  Both reports are available online for anyone interested.

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