Services/Inheritance tax planning

Inheritance tax planning

Inheritance tax done properly is a multi-year conversation, not a deathbed one. We start it early.

What this covers

Lifetime gifting strategy and the seven-year rule in practice
Trust structures: pros, cons, and the running costs nobody mentions
Business Property Relief and Agricultural Property Relief reviews
Residence Nil-Rate Band planning (£175,000 per person)
Coordination with the will and Lasting Powers of Attorney
Family conversations about who gets what and when

How we approach it

The nil-rate band is £325,000 per person and has been since 2009. The residence nil-rate band adds £175,000 where a home passes to children or grandchildren. That gives a couple up to £1 million tax-free in the right circumstances. The frozen bands and rising property prices are why this is a working-family issue now, not a wealthy-family one.

Lifetime gifts are useful, but they require you to live seven years and to give up control. Trusts give you control but cost money to run and have their own ten-year tax charges. There is no free lunch. The job is to choose the trade-off that fits your family.

An honest caveat. Most families who think they have an IHT problem do; most who think they don't are closer than they realise. There is no painless answer. The earlier you start, the more options you have. Done in the last year of life, the menu is short.

Questions we hear

How much can I give away without paying inheritance tax?

£3,000 a year as the annual exemption (carry forward one year if unused). £250 per recipient under the small gifts exemption, to any number of recipients. Plus larger gifts that fall outside IHT if you live seven years from the date of the gift. The detail is on our blog post on UK gift rules.

Do I need a trust?

Often, no. Trusts have a place but they are not the default answer. We look at the will, the gifting plan, and the residence nil-rate band first, and only consider trusts where they add something that those tools cannot.