Inheritance tax can evoke strong feelings, but here's the practical point: much of it is optional. The rules include generous allowances and reliefs that exist to be used, and families who plan ahead usually pass on far more than families who don't. The difference isn't cleverness. It's starting early and doing the unglamorous things to set a stable foundation.
Everyone can currently pass on £325,000 free of inheritance tax, and those who have homes to pass on to children or grandchildren, may be entitled to a further allowance of £175,000 (this starts to reduce for estates exceeding £2m). Married couples and civil partners can combine allowances, meaning there's potentially up to £1 million between them, before tax is payable at a rate of 40%. We'll work out what your estate is actually worth, what the bill would be today, and which of the available routes fit your circumstances. As pensions start counting towards estates from April 2027, plenty of people who didn't expect to have an inheritance tax problem may end up finding themselves with one. It's better to find out sooner rather than later, to allow sufficient planning to be put in place.
The simplest planning is often the best. You can give away £3,000 each year within the annual exemption, make regular gifts out of surplus income, and make larger gifts that fall out of your estate after seven years. There's also a question the industry rarely asks: would the money do more good now? An inheritance at 60 might provide some luxuries, but help at 35 changes a life, and you're there to see it. Where giving now is affordable and does not impact your long-term plans, this may well be the advice.
Trusts have a reputation for being complicated and slightly mysterious. Used well, they're neither: a way to set money aside for particular people on your terms, controlling when and how it's received. Useful for young grandchildren, for protecting wealth across generations, or for keeping life insurance payouts outside your estate. Used badly, they're expensive and an additional layer of admin with no benefit, so we'll be straight with you about whether one belongs in your plan at all.
Good estate planning is mostly good housekeeping: a will that says what you actually want, pension nominations that are up to date (these currently aren’t covered by your will, and most people have no idea what theirs say), powers of attorney in place while they're easy to arrange, and clear records so your family isn't doing detective work while grieving. None of it takes long. All of it matters.
.png)