Wealthy families are accelerating lump-sum gifts to children and bringing forward pension withdrawals ahead of major inheritance tax reforms scheduled for April 2027. Advisers report surging requests from clients with substantial defined contribution pots, fearing unexpected tax liabilities on unused pension wealth.

The government projects 10,500 additional estates will face IHT in 2027-28, with 38,500 paying more—adding an average £34,000 to liabilities. From April 6 next year, unused pensions face a 40 per cent IHT charge if estates exceed the £325,000 nil-rate band.

Key exemptions gaining attention include the £3,000 annual gifting allowance, seven-year rule, and normal expenditure out of income provisions. Royal London and AJ Bell report increased inquiries about accessing tax-free cash for house purchases and regular gifting strategies.

Wealth managers like Evelyn Partners and NFU Mutual observe clients taking lump sums earlier, while advisers caution that HMRC may challenge certain pension-based gifts. The rush reflects broader estate planning adjustments as families navigate complex exemptions requiring careful documentation and specialist tax advice.