Estate & Inheritance Tax Planning

Inheritance Tax (IHT) is a tax on the estate of someone who has died, including all their property, money, and possessions. It's paid if the value of the estate is above a certain threshold, currently £325,000 for individuals (known as the Nil-Rate Band), with an additional Residence Nil-Rate Band for estates including a main home passed to direct descendants. Our role in IHT planning is to help you understand these rules and minimise the tax burden on your beneficiaries.

There are several strategies to reduce your Inheritance Tax liability, including making use of available exemptions and allowances, strategic gifting, placing assets into certain types of trust, or making certain types of qualifying investments. We provide bespoke advice to determine the best approach for your individual circumstances.

The Nil-Rate Band (NRB) is the threshold up to which no Inheritance Tax is normally paid bydual's estate. Any portion of this unused by a spouse or civil partner can be transferred to the survivor. The Residence Nil-Rate Band (RNRB) is an additional allowance available when a main home is passed directly to children or grandchildren. This effectively increases the IHT-free threshold for many families, and we can help you ensure you utilise both bands effectively.

Gifts can be subject to Inheritance Tax, depending on when they are made and to whom. There are a number of allowances which are generally exempt. Larger gifts may be 'Potentially Exempt Transfers' (PETs) and become fully exempt if you live for seven years after making them. If you die within seven years though, the gift may be taxed on a sliding scale. We provide clear gifting advice to help you understand the rules and plan accordingly.

Trusts are legal arrangements that allow you to set aside assets for the benefit of others, potentially reducing the value of your estate for Inheritance Tax purposes. Once assets are placed into certain types of trusts, they may fall outside your estate for IHT. Trusts also offer control over how and when assets are distributed to beneficiaries, and can protect assets for future generations. We can explain the various types of trusts and determine if one is suitable for your estate planning needs.

The earlier you start Inheritance Tax planning, the more options you typically have and the greater the potential to reduce your liabilities. This is particularly true for strategies involving gifting, where the 'seven-year rule' applies. However, it's never too late to review your situation. Whether you're considering your first steps in legacy planning or need to reassess an existing strategy, our advisors can help you create or refine a plan that works for you and your family.

Until recently, most modern pension schemes were not included in your estate for Inheritance Tax purposes, especially if death occurs before age 75. This meant they could often be passed on free of IHT to your nominated beneficiaries. However, the rules are complex and recent changes have made it a little less clear for people. We can provide specific advice on how your pension fits into your overall estate planning and IHT strategy.