Inheritance Tax Planning.

Expert Guidance on Probate and Estate Tax

At Vault Private Client, we see inheritance tax planning as more than numbers — it’s about protecting your family’s future. With tailored advice, we help you understand inheritance tax IHT, reduce liabilities through effective estate planning, and ensure your wishes are followed smoothly through probate. Whether you want to know how to avoid inheritance tax or simply reduce the amount payable, our solicitors provide clarity and reassurance.

Understanding Inheritance Tax and Probate

When a person’s estate is worth more than the current Nil Rate Band of £325,000, inheritance tax is usually charged at 40% on the amount above this threshold. If the family home is left to children or grandchildren, the Residence Nil Rate Band (£175,000) can also apply, offering further relief.

Married couples or those in a civil partnership can transfer unused allowances between them, helping to reduce the amount of tax due. However, if the total value of your estate is worth more than £2 million, the Residence Nil Rate Band reduces — making careful planning essential.

Planning to Reduce the Amount of Inheritance Tax

There are several strategies to minimise the inheritance tax to pay, including:

• Annual gifts — you can give away up to £3,000 each tax year without it being subject to inheritance tax. Larger gifts may also fall outside your estate if you survive seven years (the seven-year rule).
• Trusts for inheritance tax planning — placing assets into structures such as discretionary trusts can remove them from forming part of your estate, whilst still protecting family members.
• Life insurance — placing a policy into trust ensures funds are available to pay inheritance tax liabilities, without inflating the estate value.
• Pensions and inheritance tax planning — most pension funds don’t form part of the estate and are usually exempt from inheritance tax, offering significant long-term advantages.
• Inheritance tax planning and wills — aligning your Will with your tax strategy ensures your wishes are clear and the estate administration process is more efficient.