UK Inheritance Tax and Lifetime Allowance Rule Changes: An Interview with Neil Robbirt, CEO of Global Investments

The UK tax landscape is undergoing some of the most significant reforms in years. Inheritance Tax (IHT) receipts are rising sharply as frozen thresholds push more estates into the net, while the abolition of the Lifetime Allowance (LTA) has rewritten the rules for pensions. With further changes scheduled between now and 2027—including new restrictions on reliefs and the inclusion of unused pensions in IHT—families, professionals, and retirees are facing complex new challenges.

To help make sense of these reforms, we sat down with Neil Robbirt, CEO of Global Investments, for an in-depth conversation. In this interview, Neil explains the real-world impact of the reforms, highlights common pitfalls, and shares practical steps individuals should consider.

Q1. Neil, why are UK inheritance tax and lifetime allowance changes such a pressing issue now?

Neil Robbirt: Because UK inheritance tax and the lifetime allowance changes are happening at the same time, and the changes affect the majority of households, not just the ultra-wealthy. Inheritance Tax receipts rose to £3.1 billion between April and July 2025, a record for that period, largely due to frozen thresholds. The nil-rate band has been stuck at £325,000 since 2009, and the residence nil-rate band remains at £175,000 despite a 15-year property boom. That means many ordinary families now face a tax that was originally designed only for the very wealthy.

On pensions, the abolition of the Lifetime Allowance in April 2024 was welcome in many ways, but it introduced new rules, new allowances, and fresh complexity. And from April 2027, unused pension pots will fall into the IHT net, which is a dramatic shift. So you’ve got inheritance tax tightening while pension rules are loosening in one sense and tightening in another. That overlap makes now a critical time to review your planning.

Q2. What do you think people most often misunderstand about these changes?

Neil Robbirt: The most common misunderstanding is assuming that abolition of the Lifetime Allowance means there are no limits anymore. In reality, the government replaced the LTA with three new allowances—the Lump Sum Allowance, the Lump Sum and Death Benefit Allowance, and the Overseas Transfer Allowance. Breaching these can still trigger charges.

On the IHT side, people assume that gifts are straightforward: survive seven years and they’re free of tax. But the little-known “14-year rule” catches many people out. If you’ve made a chargeable lifetime transfer into a trust within seven years before making a potentially exempt transfer, HMRC can look back up to 14 years. That can create unexpected liabilities.

Q3. The changes sound quite technical. How do they affect ordinary families in practice?

Neil Robbirt: For families, the effect is practical and financial. Take a couple with a family home worth £700,000 and investments of £400,000. With frozen allowances, their estate could face a significant IHT bill, even though they wouldn’t consider themselves wealthy. Add to that the fact that from 2027, their pensions may also be counted, and you can see how exposure is growing.

Another example: someone with a £1.2 million pension pot would previously have faced an LTA charge. Today, they don’t—but the Lump Sum and Death Benefit Allowance caps how much can pass tax-free to beneficiaries. That means heirs could still face tax if planning isn’t carefully managed.

Q4. What planning pitfalls do you see people falling into?

Neil Robbirt: The main pitfall is inaction. People assume they’ll deal with it later, or that their estate is too small to worry about. Yet with thresholds frozen until 2028, and asset values rising, doing nothing is often the most expensive option.

Another pitfall is not coordinating pensions and inheritance planning. Previously, pensions were one of the most efficient ways to pass on wealth. After 2027, they won’t be. That shift requires people to rethink whether they draw from pensions earlier, use ISAs differently, or restructure trusts.

Q5. How about business owners and farmers—what do they need to know?

Neil Robbirt: Business Property Relief and Agricultural Relief are both being reduced from April 2026. For business owners and farmers who relied on these reliefs to reduce or eliminate IHT, this is a major shift. It means that shares in family businesses or agricultural land may no longer enjoy the same level of protection. For those families, reviewing ownership structures and succession plans now—not in 2026—is essential.

Q6. Are you seeing changes in how clients are approaching estate planning?

Neil Robbirt: Absolutely. Clients are more aware that timing matters. There’s a surge in people making use of the annual £3,000 gifting exemption, as well as small gifts of up to £250 per person. More clients are considering trusts, though carefully, given the complexities. And on pensions, many are reviewing drawdown strategies to balance lifetime income needs with the risk of higher estate tax in the future.

Q7. Let’s talk pensions specifically. What does the abolition of the Lifetime Allowance mean for savers?

Neil Robbirt: For many savers, the abolition of the LTA was a relief. Previously, if your pension exceeded £1,073,100, you faced punitive tax charges. That barrier is gone, which means people can continue building their pension pots without fear of crossing that line.

But—and this is important—it doesn’t mean pensions are limitless.

The new Lump Sum Allowance caps how much tax-free cash you can take in your lifetime, and the Lump Sum and Death Benefit Allowance caps how much can pass to beneficiaries without tax. So while the overall ceiling is gone, there are still defined limits that affect how benefits are taken.

Q8. How do the changes affect people who had LTA protection in place?

Neil Robbirt: Those with protections such as Fixed, Individual, or Enhanced Protection continue to benefit from them. In fact, the rules now allow more flexibility because protections won’t be lost simply because you make further contributions. However, each person’s protected allowance will interact with the new system differently, so it’s vital to understand your own numbers before making withdrawals or transfers.

Q9. From April 2027, pensions will come into the IHT net. What does that mean for estate planning?

Neil Robbirt: This is one of the biggest shifts. Until now, pensions were often the most effective tool for passing on wealth because they were excluded from IHT. From 2027, unused pension pots and death benefits will be included in the taxable estate.

For families, that means a rethink. Some may choose to draw from their pensions earlier, accepting income tax now to avoid a 40% IHT charge later. Others may balance withdrawals with ISA use, because ISAs are already within IHT and using them first may allow pensions to stay outside the estate for longer. It’s about sequencing your assets properly.

Q10. How should internationally mobile individuals think about these changes?

Neil Robbirt: Mobility makes things more complex. The overseas transfer allowance now caps how much can be moved into a QROPS without triggering additional tax. For those with international ties, the new long-term resident test for IHT also matters—you become liable on worldwide assets after 10 of 20 years in the UK, and even after leaving there’s a 10-year tail.

That means someone who’s worked in the UK, built a pension here, and then moved abroad could still face UK IHT for a decade after leaving. These are the kinds of traps we work hard to help clients avoid.

Q11. Some commentators say future governments could reverse these reforms. Is that a risk?

Neil Robbirt: It is a risk, particularly with the LTA. Its abolition was politically motivated, partly to keep senior professionals like doctors in the workforce. Some opposition voices have suggested reintroducing it, but doing so would create instability and could penalise those who made decisions based on the current rules.

IHT is less likely to be reduced or simplified because it’s raising record revenues—£9.1 billion forecast for 2025/26, rising to £14 billion by 2029/30. Governments under fiscal pressure rarely cut taxes that are generating those kinds of numbers.

Q12. What practical steps should people take right now?

Neil Robbirt: Three things:

1. Review your estate plan immediately. Check how frozen thresholds and upcoming changes affect your exposure.

2. Reassess your pension strategy. Understand how the new allowances apply to you and how the 2027 IHT inclusion will affect beneficiaries.

3. Use exemptions while you can. The £3,000 annual gifting exemption, the residence nil-rate band, and reliefs like Business Property Relief are still available today but may be less generous in future.

The worst strategy is waiting. These are multi-year reforms—you can’t fix them with one decision at the last minute.

Q13. Finally, what’s your message to readers concerned about these changes?

Neil Robbirt: Don’t panic, but don’t ignore them either. These are manageable risks if you plan early and structure things carefully. The danger is that people assume the rules don’t apply to them or that their estate isn’t large enough. With property values, frozen thresholds, and pensions included from 2027, many more households will be affected than in the past.

The key is to view your finances holistically—pensions, property, savings, trusts—all working together. With clear planning, you can minimise tax exposure and make sure your assets are passed on as intended.

Conclusion

The UK’s inheritance tax and pension rules are in a period of transition. The combination of frozen thresholds, new gift rules, the abolition of the LTA, and the inclusion of pensions in IHT creates both challenges and opportunities.

As Neil Robbirt explains, the reforms demand early action and careful coordination between pensions and estate planning. For families, business owners, and internationally mobile individuals, professional advice can make the difference between unnecessary tax burdens and a secure legacy.

Need clarity on the new inheritance tax and pension rules? 

A financial adviser can help you understand how the 2024–2027 reforms affect your estate, reduce tax exposure, and protect your retirement income. Book your consultation with Global Investments today.