Inheritance tax planning
Plan what happens to your wealth — without losing sight of your own future.
Inheritance tax planning is not simply about reducing a tax bill. It is about understanding your estate, deciding what you want to pass on, and considering sensible actions while making sure you retain enough for your own life and financial security.
Inheritance tax at a glance
Start by understanding the allowances that may apply to your estate.
These figures reflect UK inheritance tax rules in force in September 2026. The amount actually available depends on your circumstances and how your estate is structured.
Nil-rate band
The standard inheritance tax nil-rate band is £325,000. It may be transferable between spouses or civil partners where it was unused on the first death.
Residence nil-rate band
An additional residence nil-rate band of up to £175,000 may apply where a qualifying home is left to direct descendants. It is subject to conditions and tapering for larger estates.
Standard rate
Inheritance tax is normally charged at 40% on the taxable value above the available bands and reliefs.
Charitable giving
A reduced 36% rate can apply to the taxable estate where at least 10% of the relevant net estate is left to charity.
The bigger picture
Your estate is more than the value of your home.
Inheritance tax planning starts by building a clear picture of what you own and who you want to benefit. Depending on your circumstances, your estate may include property, cash, investments, business interests and other assets.
The objective is then to understand the potential inheritance tax exposure and decide whether any planning is appropriate.
- Understand the current value and structure of your estate.
- Identify the people and causes you want to benefit.
- Consider your own future spending, income and care needs first.
- Work alongside solicitors and tax professionals where legal or specialist tax work is required.
Planning options
There is rarely one single inheritance tax solution.
Lifetime gifts
Gifting can reduce the value held in your estate, but the tax treatment depends on the type of gift, exemptions used and how long you survive after making certain gifts.
Use your wealth during your lifetime
A financial plan can help you understand whether you can afford to spend or gift more without creating an unacceptable risk of running short later.
Trust planning
Trusts can be useful in some circumstances, but they have legal and tax consequences. Appropriate legal and tax advice is important before establishing or altering a trust.
Life assurance
Life cover written under an appropriate trust can sometimes be used to provide funds towards a future inheritance tax liability rather than trying to eliminate the liability itself.
Charitable legacies
Gifts to qualifying charities are generally exempt from inheritance tax and, in the right circumstances, charitable giving can also affect the rate applied to the taxable estate.
Business and agricultural assets
Qualifying business and agricultural assets can receive inheritance tax relief, although important rule changes took effect from 6 April 2026 and specialist advice may be required.
Gifting
Giving money away can be simple. The inheritance tax rules around it are not always simple.
Some gifts fall within exemptions immediately. Other gifts may remain relevant for inheritance tax for a period after they are made. Keeping good records is therefore an important part of the planning.
The annual exemption is currently £3,000, but that is only one part of the gifting rules. Other exemptions and the normal-expenditure-out-of- income rules may be relevant depending on the circumstances.
£3,000 each tax year
The annual gift exemption can be used for one person or divided between several people. Unused annual exemption can generally be carried forward for one tax year.
Timing can matter
Certain lifetime gifts can fall outside the estate if the donor survives for seven years. If death occurs earlier, the position depends on the nature, timing and total value of the gifts.
Normal expenditure from income
Regular gifts made from surplus income may qualify for a separate exemption where the relevant conditions are satisfied and the donor can maintain their normal standard of living.
Keep evidence of what was given
Dates, amounts, recipients and the exemption being relied on can become important later when an estate is being administered.
Do not plan yourself into a corner
The best tax saving is not one that leaves you short of money later.
One of the most important parts of inheritance planning is knowing how much you can genuinely afford to give away or restructure.
Legacy planning should still protect your own lifestyle.
Before making significant gifts, we can model your likely future income, expenditure and capital needs so you can see what different decisions might mean over time.
This is particularly important where retirement income, care costs, property decisions or significant one-off expenditure could alter the amount you may need to retain.
More complex estates
Some inheritance tax questions need specialist input.
We can help coordinate the financial-planning side and work with your solicitor, accountant or tax adviser where the estate involves legal, tax or cross-border issues outside ordinary financial advice.
Overseas assets & residence
From 6 April 2025, long-term UK residence rules replaced the old domicile/deemed-domicile framework for inheritance tax on overseas assets. Cross-border estates should be reviewed carefully.
Business Relief
From 6 April 2026, 100% Agricultural and Business Relief is subject to a combined £2.5 million allowance for qualifying property, with 50% relief applying above the available allowance. The detailed rules can be complex.
Wills, trusts & ownership
The way assets are owned and the terms of wills or trusts can materially affect the estate. Legal documents should be prepared or reviewed by an appropriately qualified legal professional.
How inheritance planning works
Understand the estate first. Then decide whether any planning is worth doing.
Map the estate
We start with your assets, liabilities, family circumstances and the people or causes you want to benefit.
Estimate the exposure
We consider the allowances, exemptions and reliefs that may apply so you can understand the potential inheritance tax position.
Explore the options
We consider appropriate financial-planning options and coordinate with legal or tax professionals where specialist work is needed.
Review over time
Estate values, family circumstances and tax legislation change. Where ongoing service is agreed, the planning can be revisited as those factors evolve.
Plan early
You do not need to give everything away to start inheritance planning.
Start by understanding the current position, what you want your wealth to achieve and how much you need to retain for yourself. From there, we can help you identify the planning options worth exploring.
Tax: Tax treatment depends on individual circumstances and may change. This page is a general overview and is not personal tax advice.
Professional advice: Inheritance tax planning can involve legal and specialist tax matters. Appropriate solicitor, accountant or tax advice may be required alongside regulated financial advice.