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Many More Households Could Face Inheritance Tax from 2027 – What It Means for Mortgage Holders
Recent analysis warns that sweeping changes to UK Inheritance Tax (IHT) rules, set to take effect from April 2027, could bring millions more households into the IHT net. For homeowners—especially those in areas like Croydon, where property values have risen sharply over the past decade—the implications for estate planning and wealth transfer are significant. At Gordon Blair, we believe it’s crucial for Croydon residents to understand how these changes may affect their homes, pensions, and wider financial strategies.
What’s Changing in 2027?
Under the proposed reforms, pension wealth will be included in estate valuations. That shift alone could reverse a decade of easing IHT exposure.
The number of households potentially liable for inheritance tax is projected to rise from about 1.6 million to 5.1 million
The total value of estates subject to IHT may climb from around £472 billion to £1.9 trillion.
London and the South East—regions including Croydon—are expected to see a particularly heavy impact, with more than a quarter of households possibly exceeding the £1 million threshold.
Despite these looming changes, public awareness is low. In a survey of 1,500 people, fewer than 30% said they were fully aware of the 2027 IHT reforms, and about one-third admitted to no knowledge of them at all. The Intermediary
Steps You Can Take Now (Ahead of 2027)
To mitigate IHT exposure and preserve more for your loved ones, consider:
– Reviewing your mortgage strategy
Work with a specialist advisor (such as us at Gordon Blair) to see if refinancing or restructuring your mortgage could help reduce your estate’s liability.
– Lifetime gifting
Gifting assets—within allowable tax-free limits—while you are alive can shrink your taxable estate.
– Trusts and estate planning structures
Carefully setting up discretionary trusts or other vehicles may help protect your estate from future tax burdens.
– Reassessing pension drawdown plans
Since pension wealth inclusion is a key change, the way you access pension funds could influence your estate’s IHT exposure.
– Using investment bonds and other tax-efficient assets
Some investment vehicles may help in limiting IHT exposure while still allowing growth.
Navigating these reforms will require expert guidance. At Gordon Blair Mortgage & Insurance Brokers, we can advise Croydon homeowners on how mortgages, protection, and estate planning intertwine under the coming changes.
How Gordon Blair Can Help in Croydon
We can review your mortgage arrangements with a focus on your estate and tax planning.
Our advice is tailored to help you consider inheritance tax and how it fits into your long-term financial strategy.
For South London residents, we offer local insight into property values, tax trends, and the unique estate planning challenges in the area.
Our holistic approach ensures your mortgages, insurance, and wealth transfer strategies are all aligned, helping you stay ahead of upcoming tax changes.