A Trust Before April 2026 May Not Be Right for Everyone

But for those it is right for, the clock is ticking.

Why this deadline matters

In a recent article, I wrote about the devastating impact of the anti-forestalling rules on a small but vulnerable cohort of farmers and family business owners. For that group, two clocks are already ticking. The first is the clock to death before midnight on 5 April 2026. The second is the clock to death after that date, and whether they are married or in a civil partnership when it happens.

There is now a third clock that runs in parallel. For farmers and family business owners for whom a trust may be suitable, the same deadline of midnight on 5 April 2026 applies. We are now inside the final stretch. Less than 90 days remain.

This should mean TEPs, estate planners, accountants, and advisers working flat-out to identify those families where trust planning is appropriate, and ensuring that, where suitable, structures are in place before that deadline passes.

We have been here before

There is a striking historical parallel that should not be ignored. Most people know that transfers into trust are generally Chargeable Lifetime Transfers (CLT) under the Inheritance Tax Act 1984. What is less widely appreciated is that the UK has already lived through a near-identical moment.

In 1975, under a Labour government led by Harold Wilson and his chancellor Denis Healey, the UK economy was on its knees. In the space of 50 years, Britain had gone from global superpower to the ‘sick man of Europe’. Vast wealth accumulated during the Empire years had been spent fighting the Second World War and repaying enormous debts, particularly to the United States. Poor post-war economic management left the government scrambling for revenue.

Wilson/Healey’s response was Capital Transfer Tax (CTT). For the first time, the state no longer waited for people to die before taxing wealth. Instead, tax was pulled forward into lifetime transfers. That single change killed, almost overnight, what had become known as the Rockefeller principle: ‘Own everything. Control nothing.’ Trusts, which had been extensively used by wealthy families, virtually disappeared as a planning tool.

Many think that it was Margaret Thatcher who introduced CLTs. While this is strictly true it was not so much an ‘introduction’ but more of a softening to the Wilson/Healey budget. What is often misunderstood is that this introduction of CLT was not a Conservative attack on the wealthy. The lifetime charge already existed under Labour. What Margaret Thatcher later did was soften the regime by introducing Potentially Exempt Transfers (PET), allowing gifts outside trust to fall out of account after seven years.

But more importantly and relevantly, the framework for trusts never changed. And it has never been reversed.

History matters because it tells us what happens next

The lesson from 1975 is simple and uncomfortable: Once a lifetime tax framework is introduced, it rarely if ever goes away. Reliefs may be tweaked at the margins, but the door never fully reopens.

This is why the current window matters so much. For decades, APR and BPR meant that farmers and business owners were largely insulated from the lifetime transfer regime. That insulation is now being removed.

From April 2026 onwards, the same logic that applied to wealthy individuals after 1975 will apply to qualifying farms and family businesses. And just as it did then, the opportunity will disappear quietly, permanently, and without fanfare.

The numbers are not abstract

The impact is not theoretical. Once the zero-rate position is lost, the cost of moving assets into trust can be as much as 10% of the value above the new £2.5 million allowance. That means:

• A £12.5 million farm or family business could face a £1 million difference depending purely on timing.
• A £100 million business or estate could face a £10 million difference.

That is between setting up the trust on 5th April this year or setting it up on the 6th.

So, who should be considering trust planning now?

This is not about saying trusts are right for everyone. They are not. Large, complex empires such as JCB or Dyson will already have extensive structures, professional teams, and long-established planning in place.

The real risk sits in the middle ground. Farms and family businesses where:

• Ownership is straightforward
• There are one or two principal owners
• Shareholdings are simple
• External finance is limited
• Family structures are clear

These are precisely the businesses most at risk of doing nothing because of over-caution.

Addressing the common objections

Several objections are often raised. Most deserve consideration. Some deserve challenge.

‘The law might change.’ With less than 90 days to go, the consensus is clear. The increase to £2.5 million is likely the final position.

Loss of control. For simple structures, trusteeship and control can be aligned. This is not new. It is the ‘Rockefeller principle’ properly applied.

Spousal exemption. This does not solve the problem. It merely defers it.

Stamp Duty and costs. These are real and measurable. But they must be weighed against a potential 10% permanent tax cost.

Ten-year charges. These spread tax over time, rather than triggering a single catastrophic 40% hit that forces a sale or breakup of a business.

Complexity and professional risk. This is an argument for good advice, not inaction.

None of this is about avoiding tax altogether. It is about reducing the risk of destroying a family business or a multi-generational farm.

The real decision

The decision is not ‘trust or no trust’. The decision is: ‘Is this suitable for us, and if so, are we prepared to lose the option forever by waiting?’

That question must be answered before midnight on 5 April 2026. History shows that once this window closes, it is very unlikely to reopen. And silence, hesitation, or over-caution will not protect families from the consequences.

One principle remains, whichever route is taken: protection is non-negotiable

Whichever direction a farmer or family business owner ultimately takes on trust planning, one principle remains unchanged. Protection is essential.

Trusts, estate planning, and tax strategy deal with structure. Life assurance deals with outcome.

The purpose of all of this work is not clever planning for its own sake. It is to prevent forced sales, fire-sales, break-ups, and loss of control at precisely the worst possible moment. That is why protection planning must sit alongside trust and estate planning, not after it.

In practice, this usually means three core pillars of protection:

• Whole of Life assurance, written in trust, to provide guaranteed liquidity when it is needed most, often with premiums paid either personally, via surplus income, or from within an established trust structure where appropriate.
• Relevant Life cover, which for many business owners remains the most tax-efficient form of personal protection available.
• Key Person cover, to ensure that the business can survive and function during the period of greatest vulnerability.