Trustee tax planning: IHT cap on excluded property trusts

A last minute inheritance tax concession on excluded property trusts still leaves trustees with a complex landscape of long-term residency and tail periods to manoeuvre, explain Kate Johnson, partner, and Caroline Russell, senior associate at Wedlake Bell LLP

Significant changes to the UK taxation of trusts took effect from 6 April 2025. Rather belatedly, in the Budget last November, the government announced a concession – in the form of a cap on inheritance tax (IHT) – for certain excluded property trusts. This article considers the potential impact of the concession and what trustees should consider now.

The position before 6 April 2025

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