Inheritance tax planning

Thanks to the Residence Nil-Rate Band (RNRB), individuals who leave a home to their direct descendants get an extra £175,000 allowance. Combined with the standard £325,000 nil-rate band, this means one person can currently pass on up to £500,000 tax-free – or £1 million for a married couple or civil partners (by transferring any unused allowance to the surviving spouse).

However, not everyone qualifies for the full RNRB (for example, the allowance is tapered away for estates over £2 million, and the property must be left to a ‘direct descendant’), so it’s important to get advice tailored to your situation. With effective planning (such as using both spouses’ allowances and structuring your Wills correctly), even moderately sized estates can legally avoid or minimise IHT.

What my Inheritance Tax planning service includes:

My Inheritance Tax planning service typically includes:

• Initial fact finding consultation: A thorough appointment (in person or by phone) to map out your assets, family situation, and objectives. I’ll identify the extent of your estate and any potential inheritance tax liability.
• Review of your current Will(s): I will examine any existing Wills or codicils to understand your plans and ensure they make full use of IHT allowances (for example, spouse exemptions and any trusts or gifts mentioned).
• Analysis of IHT exposure: A calculation of your estate’s exposure to IHT, taking into account the £325,000 nil-rate band and any additional reliefs or exemptions applicable to you (such as the residence band or charity exemptions). This includes identifying opportunities to use gifting allowances or other exemptions to reduce your taxable estate.
• Advice on lifetime gifting: Discussions around any lifetime gifts you wish to make (or have already made) and the inheritance tax consequences.
• Trust planning (if appropriate): Guidance on whether setting up any trusts would benefit your situation. Placing assets into a trust can remove them from your estate for IHT (provided you survive seven years after the transfer), although we will carefully consider any initial charges or complexity. Trusts can be useful for controlling how assets are passed down (for example, to young or vulnerable beneficiaries) while also providing long-term tax advantages.
• Business and agricultural relief advice: If you own a business or farm, I will advise on Business Property Relief (BPR) and Agricultural Property Relief (APR). These reliefs can currently allow qualifying business or farming assets to be passed on free of IHT (or at a reduced value) – an invaluable relief for family businesses. Note: The rules are changing – from April 2026, the first £1 million of your qualifying business or agricultural assets will still get 100% IHT relief, but any value above £1 million will only qualify for 50% relief (effectively a 20% tax rate on the excess). I will help you navigate these changes, suggesting strategies for the future.
• Pensions and IHT: I will review how your pension forms part of your estate plan. Until recently, unused pension pots could be passed outside your estate (no IHT), making pensions a great IHT shelter. New rules from April 2027 will change this – any unused pension funds you leave behind will count as part of your estate for IHT purposes. Further, it’s important to note that holding AIM shares or business and agricultural property within your pension may mean missing out on valuable Business Property Relief (BPR) or Agricultural Property Relief (APR), as these reliefs typically cannot be claimed on assets held within pension schemes. I will suggest strategies to respond to this change, such as possibly drawing down or rearranging pension benefits, so you don’t inadvertently leave a large tax bill.
• Report preparation: After gathering all necessary information and considering your aims, I will provide clear, comprehensive advice on your inheritance tax position, along with recommendations for action. This will cover the strategies we’ve discussed – for instance, gifting plans, Will changes, life insurance solutions, trust options, and any other steps suited to your circumstances. My goal is to give you a practical roadmap to reduce the IHT your estate may have to pay, while meeting your family’s future needs.
• Follow-up support: I include any follow-up correspondence or conversations needed to clarify the advice and help you implement the recommendations. Inheritance Tax planning often raises further questions, and I’m here to ensure you fully understand your options. If needed, we can have additional calls or emails to fine-tune your plan or to liaise with your financial adviser/accountant (with your permission).
• Updated estate documents: If appropriate, I will provide a quote for drafting new Wills. Often, effective IHT planning goes hand-in-hand with updating your Will – for example, to incorporate trusts, charitable bequests, or to ensure each spouse’s estate passes in a tax-efficient manner.
• Product recommendations (if needed): Where suitable, I will make you aware of financial products that might help reduce an IHT liability. A common example is a life insurance policy written in trust – this can provide a lump sum for your executors to pay the IHT bill, preventing them from having to sell assets. I am not FSA regulated and do not sell or recommend specific financial products myself. I will point you in the right direction and recommend specific advisors if I believe it to be in your best interests, but I will always remain independent.

Throughout this process, my aim is to tailor the advice to your family and financial situation. Inheritance Tax planning can involve many tools and exemptions – I will explain everything clearly so you understand the pros and cons of each strategy.

Remember: Inheritance Tax planning is most effective when done early – don’t wait until it’s too late to put these plans in place. Taking action now can save your family a substantial amount in the future, giving you peace of mind that you’ve protected what you’ve worked hard for. Let’s ensure that more of your estate goes to your chosen beneficiaries, and less to the taxman.