UK legislative changes impact rental tenancies and pension inheritance taxes

Recent and upcoming legislative changes in the United Kingdom are impacting property rights and inheritance tax planning. Under the Renters’ Rights Act, which abolished fixed terms on May 1, tenancies in England have transitioned to periodic, open-ended agreements. While this means landlords are no longer bound by fixed-term contracts, specific protections remain regarding the timing of evictions. For instance, if a landlord intends to sell with vacant possession, they must provide four months’ notice, and this notice cannot expire during the first year of the tenancy.

In the financial sector, significant changes are approaching regarding pension taxation. Starting in April 2027, most unused pension funds are expected to be brought into the inheritance tax net. Previously, pension pots could often be passed on outside of an estate for inheritance tax purposes, making them highly tax-efficient assets for beneficiaries. The upcoming shift means these funds may be subject to a 40 per cent tax rate when an estate is assessed, necessitating new financial planning strategies for those with substantial untouched pensions.