The House of Lords Finance Bill Sub-Committee is conducting an inquiry into the draft legislation for Finance Bill 2025-26. Areas under consideration include measures targeting promoters and plans to reform inheritance tax (IHT). An update on the Finance Bill 2025-26 is expected from the government at the Autumn Budget 2025. 

Measures targeting promoters 

In July 2025, the government published draft legislation for Finance Bill 2025-26 that it says will enable HMRC to close in on the promoters of marketed tax avoidance. The measures include the introduction of a strict liability criminal offence for failure to disclose a tax avoidance scheme.  

ICAEW supports the government’s policy of improving standards in the tax advice market and driving out the “bad actors”. However, ICAEW believes that the legislation, as currently drafted, misses the target and will instead impose considerable extra burdens and costs on the vast majority of tax professionals doing a good job. ICAEW’s concerns are set out in more detail in an earlier article. 

ICAEW explained its concerns to the House of Lords on 13 October 2025, alongside representatives of other professional bodies. Drawing on this evidence, the House of Lords has written to the government with questions in a number of areas including: 

• Why the government is taking the proposed course of action. The House of Lords asks whether it is appropriate to base a criminal office on the existing disclosure of tax avoidance (DOTAS) regime, whether a more targeted criminal offence has been considered and why the proposed new criminal offence is necessary at this time. 
• What consideration the government has given to possible impacts. This includes the impact the proposed changes could have on the tax advice market generally, businesses and the economy.  

If enacted, the government’s package of measures targeting promoters will take effect from the date that the Finance Bill receives Royal Assent.  

IHT reform 

Draft legislation included in Finance Bill 2025-26: 

• makes significant changes to business property relief (BPR) and agricultural property relief (APR), including the introduction of a new £1m allowance for 100% BPR and APR from April 2026; and
• brings most unused pension funds and death benefits into the scope of IHT from 6 April 2027. 

ICAEW has set out its concerns with the draft legislation in both written and oral evidence to the House of Lords. On the APR/BPR reforms, ICAEW warns that businesses and farms may need to sell essential trading assets in order to fund an IHT liability, and that this could create a double tax charge. ICAEW recommends that relief from double tax charges is given and that the government considers making the £1m allowable transferrable between spouses.  

On IHT on pensions, ICAEW is concerned that personal representatives will be liable for paying IHT on pension funds over which they have no control. Estates may not have the funds or the appetite to take the legal action to recover the IHT from uncooperative pension beneficiaries (who may not be the same as the estate beneficiaries), leaving the estate beneficiaries to unfairly bear tax that should be borne by others. 

Further information 

• ICAEW has major concerns about draft Finance Bill legislation | ICAEW
• Tax returns and Finance Bill concerns | ICAEW