How the Autumn Budget Changes Affect UK Lasting Power of Attorney

28th November 2025

Updated: Monday 30th March 2026

What changed in the Autumn Budget?

The Autumn Budget introduced several tax and estate-planning measures that will affect in the future how people manage their wealth in later life. These changes include:

• Inheritance Tax (IHT) adjustments, including updates to certain reliefs.
• Pension reforms, notably around bringing unused pension funds into the IHT regime from April 2027 onwards.
• Capital Gains Tax (CGT) changes, such as reductions to key reliefs.
• Wider fiscal measures affecting thresholds, savings and long-term planning.

The shifts mean individuals and families would be well advised to revisit their estate planning.

Will the new IHT rules affect LPAs?

Changes to IHT reliefs and thresholds mean more estates may face future tax exposure. This means that if someone loses mental capacity, their Property & Financial Affairs Attorney may need to manage tax-sensitive decisions on their behalf. The type of things that could be included in that are:

• Continuing any existing gifting strategies
• Selling or restructuring assets
• Managing potential IHT liabilities
• Preserving reliefs for property, business or agricultural assets

Attorneys are compelled to always act in the donor’s best interests, so clear preferences and instructions within an LPA are now more important than ever to avoid unintended consequences down the line.

Will the pension changes affect attorneys?

From 2027, unused pension pots may be included within the estate for IHT purposes. This could affect attorneys in several ways:

• They may need to decide whether and when to withdraw pension funds.
• Pension drawdown decisions now carry IHT consequences.
• Families may rely more on pension assets to balance lifetime and estate planning.

All this means donors should consider beig explicit about their pension in their LPA.

Will CGT changes influence attorney decisions?

Reductions in CGT reliefs can alter the timing and desirability of asset disposals. Attorneys may need to:

• Review whether selling assets is still as financially beneficial
• Maintain detailed records justifying any transaction
• Seek professional tax advice when decisions carry significant implications

With increased tax sensitivity, attorneys must keep clearer paper trails of their decision making than ever before.

Do these Budget changes require existing LPAs to be updated?

Not legally, but, practically speaking, in some case the answer will be yes. LPAs drafted before these reforms may not be ‘tax-aware’ anymore. Using a service like Power of Attorney Online can help attorneys ensure they’re up to date with all the latest guidance in this sector.

What should donors do to prepare for the future?

To adequately future-proof your planning, a donor should:

• Review their LPA to ensure they address gifting, pensions, and asset management
• Document their long-term tax strategy and make their attorneys aware of it
• Consider appointing a professional as attorney if you have particularly complex affairs
• Ensure you attorneys know when to seek professional financial or tax advice