Understanding Inheritance Tax.
IHT is a tax charged on your estate when you pass away. Many see this as unfair, as assets can be taxed twice – first through income tax during your lifetime, and again through IHT on death. Unsurprisingly, most people are keen to reduce their exposure wherever possible.
Every individual can leave £325,000 of value tax-free. If you own a property you’ve lived in and leave it to children or grandchildren, you can benefit from an additional £175,000 allowance – the “Residence Nil Rate Band” (RNRB). However, if your estate exceeds £2 million, the RNRB reduces by £1 for every £2 over this threshold.
If you’re married and leave everything to your spouse, no IHT is payable on the first death. On the second death, the survivor can use any unused allowances from the first spouse. Our expert team is here to guide you on the most appropriate strategies for your circumstances, helping ensure you and your family benefit from available allowances and effective planning.
Lifetime Gifts and Other Solutions.
You may have heard of the “7-year rule”. You can gift unlimited assets during your lifetime without an immediate IHT charge, but you must survive seven years for them to fall outside your estate. If you die within that period, the value returns to your estate, though Taper Relief applies if you survive at least three years. These gifts must be irrevocable – if you benefit from them again, the seven-year clock resets.
Outright gifting means losing control. A possible alternative is gifting into a trust. Trustees – potentially you and your spouse – retain control, and CGT may be deferred until future disposal. We work closely with financial advisers to calculate how much you can afford to gift based on your specific goals, as part of our “One Wealth” approach.
You could also consider life insurance to cover IHT liability – especially useful if you have a mortgage or dependents. Lastly, Family Investment Companies (FICS) can be a more flexible way to manage succession, with no cap on the amount invested. While they involve setup and admin costs, these are often outweighed by the long-term tax benefits.
THE BEST IN THE BUSINESS.
Our Private Wealth Planning team specialises in inheritance tax, gifting, trusts and legacy structuring.
Russell Kaminski
Partner and Head of Private Client
Lucy Cresswell
Associate
Alison Rocca
Partner
Jason Stanley
Partner
Holly Greensmith
Solicitor
Matt Fleetwood
Group Chief Executive & Founder
Mark Dawson
Group Managing Director
Amanda McAlister
Head of Group Consumer Brands
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Protect your legacy with smart, tailored inheritance tax planning from our expert team.
"Thank you ever so much, Russell and Lucy for helping me with the death of my father. The whole process of your services has been a godsend. Just wanted to say thank you and take care."
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