The Labour Party’s first budget in over a decade has introduced significant changes to Inheritance Tax (IHT) and Capital Gains Tax (CGT), with wide-reaching implications for families across the UK. These reforms, set to take effect in April 2026, could profoundly impact how wealth is transferred, how estates are planned, and how family assets are divided during divorce.

If you’re planning your family’s financial future or navigating the complexities of a divorce, these changes may require a fresh look at your legal and estate planning strategies.

What’s Changing? The Key Tax Reforms

The upcoming budget has sparked conversations about the potential effects on business and property disposals, estate planning, and family wealth transfer. Key changes include:

• New Tax Treatments for Business and Agricultural Reliefs: Revisions to IHT and CGT reliefs could change the way assets such as farmland and business properties are taxed, impacting long-term wealth planning.
• Inclusion of Pensions in Estates for IHT: For the first time, pensions may be considered part of an estate for IHT purposes, potentially increasing tax liabilities for families.

These changes make it essential to rethink how assets are managed, whether for legacy planning or during major life events such as marriage or divorce.

What This Means for Divorce and Family Wealth

Under the laws of England and Wales, all assets—including inheritance and family gifts—are considered in divorce settlements. Whether these assets are shared or ringfenced depends on factors like:

• Timing: When the asset was received.
• Use: How it was utilised during the marriage.
• Needs: Whether the couple’s reasonable needs can be met without dividing the asset.

Courts may allow certain inherited assets to remain untouched, but this is far from guaranteed. With the UK divorce rate still above 40%, the changes to tax reliefs add complexity to an already challenging process.

How Nuptial Agreements Can Help Protect Wealth

The evolving tax landscape highlights the value of prenuptial and postnuptial agreements as tools for safeguarding family wealth. These agreements:

• Clearly outline how assets, including family gifts and inheritances, will be handled during divorce.
• Offer an added layer of protection for wealth transferred under IHT rules.
• Complement estate planning strategies by helping to preserve family legacies.

While not legally binding, courts give significant weight to well-drafted nuptial agreements, especially when they are fair and created with independent legal advice.

Why Acting Now is Crucial

The new tax rules are a wake-up call for families to review and update their estate and wealth management plans. Proactive planning can ensure that your assets are protected and that you and your loved ones are prepared for any potential changes in tax liabilities or financial obligations.

How Vyman Solicitors Can Support You

At Vyman Solicitors, our Family Law and Private Client teams specialise in helping individuals and families navigate these complex issues. Whether you’re facing a divorce, planning for future wealth transfers, or considering a nuptial agreement, we’re here to provide expert advice tailored to your needs.

Our services include:

• Assisting with the drafting and implementation of prenuptial and postnuptial agreements.
• Providing clear guidance on the implications of IHT and CGT changes for family wealth.
• Supporting clients through sensitive divorce proceedings to achieve fair outcomes.
• Reviewing estate plans to align with new tax regulations.

Take Action Today

The changes to IHT and CGT are coming fast, and early preparation is key. Whether you’re planning your family’s legacy or navigating the complexities of a divorce, now is the time to act.

Contact us today at info@vyman.co.uk or call 020 3926 6987 to schedule a consultation with our expert team.

Let us help you protect what matters most.

By acting now, you can ensure that your family wealth remains secure and your future plans stay on track.

At Vyman Solicitors, we’re here to guide you every step of the way.