Inheritance tax advice and estate planning

How to protect your wealth and your beneficiaries'

Inheritance Tax (IHT) is a tax levied on an individual's estate after their death after deducting any liabilities, exemptions and reliefs. With a potential tax rate of 40%, it is worth considering how to reduce your inheritance tax liability and ensure that your wealth passes to your chosen beneficiaries.

With a potential tax rate of 40%, it is well worth spending a little time planning to protect your hard-earned wealth and ensuring it passes on to your chosen beneficiaries, be that family or friends, rather than to HMRC.

 Inheritance Tax

Once thought of as a tax for only extremely wealthy people to worry about.  IHT receipts have increased as a share of GDP since 2009-10, mainly due to rises in asset prices, which have meant more estates than ever are likely to face an inheritance tax bill. In fact, HMRC collected £6.1 billion from bereaved families in 2021/22. The amount of inheritance tax collected is expected to reach £6.8 billion by 2023/24, an increase of £1.3 billion in just five years (OBR forecast January 2023).

Our financial planning and wealth management team, together with our personal tax specialists, can help you with your inheritance planning.

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Inheritance Tax FAQ

 When does Inheritance Tax (IHT) become payable?

If your estate has an inheritance tax liability, after deducting any liabilities, exemptions and reliefs, the people you want to leave your assets to, i.e., your beneficiaries, are the people who ultimately will have to pay the IHT bill. The tax needs to be paid before your estate can be distributed. Inheritance tax is typically paid on the value of the assets a person leaves behind when they die, but it can also apply to some gifts and transfers that are made during someone’s lifetime. Your estate is defined as your property, savings, and other assets after any debts and reasonable funeral expenses have been deducted.

This is something that many families can overlook, but the earlier you start planning, the more options you may have.

 What can I do to limit the amount my family pay in inheritance tax?

Currently, most people have a tax-free inheritance tax allowance of £325,000 – known as the Nil-Rate Band. The allowance has remained the same since 2009-10 and continues to be frozen until 2025/26.

There is another allowance called the Residence Nil Rate Band (RNRB) in addition to the aforementioned Nil Rate Band. In the current tax year, the RNRB is £175,000 each. This means a married couple, or civil partners, could pass a total of £1m to their direct descendants with no IHT liability to pay. This is a complex allowance with various exceptions and caveats attached.

You can leave your entire estate to your spouse or civil partner free of inheritance tax, but if you want to leave some or all of your estate to family and friends, then it may be liable for IHT. And you also need to consider, as part of your estate planning, what happens when the second spouse/partner dies.

 Should I make a will?

Many people procrastinate when it comes to writing a will. According to research by Canada Life 3 in 5 adults in the UK don’t have a will. We would encourage everyone to make a will as soon as possible.

If you don’t clarify your wishes in a will, the state will take over and distribute your estate according to a formula set out in the rules of intestacy. The results are not always what you would expect and can also potentially create unnecessary tax consequences.

 How can I reduce Inheritance Tax liability?

There are many ways, with careful financial planning, IHT can be reduced, offset, or eradicated altogether. Potential considerations could involve simply giving money away to reduce your estate, but that can create its own disadvantages and whilst some gifts are tax-free, some only help in certain circumstances such as when the gift is made, to whom and how much.

Our financial planning and wealth management team together with our personal tax specialists, can provide advice and assist you with your Estate & Inheritance planning by:

  • Reviewing your assets and calculating your potential IHT liability
  • Discussing your financial objectives and who you want to benefit from your wealth
  • Reviewing your existing will and recommending any changes
  • Working with your solicitor to ensure your will is drawn up or updated to meet your objectives
  • Ensuring the savings from reliefs, such as Agricultural Property Relief and Business Property Relief, are maximised
  • Reviewing your entitlement to the residence nil rate band on death and advising how the position could be improved
  • Advising on lifetime gifts to maximise the use of the various exemptions and reliefs
  • Advising on the use of trusts
  • Looking at how you can use your pension funds as part of your IHT planning

Act now on Inheritance Tax

Don't wait until it's too late to plan for your estate and potential inheritance tax liability.

Our team can provide you with expert advice and assistance in all areas of inheritance planning, from reviewing your existing will to advising on lifetime gifts, trusts, and other tools. Let us help you secure your legacy today!

Contact our personal tax and wealth management advisers by dropping us a line at, calling 0808 144 5575 or clicking the link below.

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