Budget 2026: NS&I estate payments and trusts with overseas trustees
Two smaller Budget changes
Budget 2026 included two changes for estates and trusts that could matter if they apply to you.
The first helps families whose loved one’s NS&I savings were missed when they died. The second helps trusts where a trustee moves to the UK for a short time.
Both are reliefs. Neither adds a new tax. They will not affect most families, but if you are an executor or a trustee it is worth knowing they exist.
What was the NS&I tracing error?
NS&I found that some savings were never paid to the estates of customers who had died.
Some accounts were not traced when families made bereavement claims, so the money was never paid out. NS&I is now paying the full value back to the affected estates.
To make up for the delay, payments are increased by the interest earned, or by Bank of England base rate plus 1%, whichever is higher. Compensation may also be paid.
If you dealt with the estate of someone who held NS&I savings, this could apply to you, even if the estate was settled some years ago. Without a change in the law, a repayment like this could have meant reopening an estate that was already closed.
Tax relief on NS&I repayments
The government has confirmed these repayments will not create extra tax for affected families.
- No inheritance tax. The affected NS&I holdings will be fully exempt.
- No income tax for executors. Interest earned before death, or while the estate is being dealt with, will not be taxed.
- Backdated if needed. The rules can apply to earlier periods, but cannot increase anyone’s tax.
The detail will be set out in regulations once the Finance Bill becomes law.
Trusts with trustees moving to the UK
From 28 October 2026, a trust can avoid a capital gains tax charge if a trustee moves to the UK briefly.
A trust’s tax residence depends largely on where its trustees live. When a trust stops being UK resident, it can face an exit charge on its gains.
Now, if a trust became UK resident only because one trustee moved here, there is no exit charge when it leaves again in the same tax year or the next. This mainly helps families with trustees abroad.
For example, a trustee living in Spain might move back to Wales for a few months to care for a parent. Before, that move alone could have triggered a tax charge on the whole trust when they left. The new rule takes effect from 28 October 2026.
What to do next
If you are an executor or a trustee, these changes may make your job easier.
If you are dealing with an estate and NS&I gets in touch, keep the letters with the estate papers. If your family trust has trustees overseas, check where they live before anyone moves. Read what does an executor do? and what is a trust?
Both changes are a reminder to keep clear records. A list of the accounts, investments and policies you hold, kept with your will, makes it far easier for your executors to find everything.
How PJH Estate Planning can help
PJH Estate Planning can review your will, LPAs and tax plans against the latest rules. Start with our free Estate Health Check: 10 quick questions that show any gaps in your plans. You can visit our offices, or we can visit you at home.
Sources
- GOV.UK: Budget 2026 overview of tax legislation and rates
- GOV.UK: National Savings and Investments tracing issue
- GOV.UK: Capital Gains Tax exit charges for temporarily migrated trusts
General information as at October 2026. Not legal, financial or tax advice.