Annual and Lifetime Gifting
Use your £3,000 annual exemption every year and consider larger potentially exempt transfers. Gifts to individuals become tax-free if you survive seven years after making them.
Inheritance Tax
Your family home and savings could face a 40% tax bill when you're gone. We help families protect what they've worked for through smart planning that keeps more money with the people you love.
The Financial Conduct Authority does not regulate advice on Estate Planning or Inheritance Tax Planning.
Information regarding taxation levels and basis of reliefs are dependent on current legislation and individual circumstances, are not guaranteed and may be subject to change.
This information is for guidance only and does not constitute financial advice.
Inheritance tax planning guide
When your life's work faces a 40% tax bill
Most families don’t realise their estate could trigger inheritance tax until it’s too late. With house prices rising and the tax-free threshold frozen at £325,000 since 2009, more families face losing almost half their wealth to tax. Simple planning now can save your family thousands and ensure your legacy goes to the people you care about, not the taxman.
Types of inheritance tax reliefs and exemptions available:
- Nil rate band of £325,000 per person with 0% tax on amounts below this threshold
- Residence nil rate band of £175,000 when leaving your home to children or grandchildren
- Spouse exemption allowing unlimited tax-free transfers between married couples and civil partners
- Annual gift allowance of £3,000 per year that can be carried forward one year if unused
- Potentially exempt transfers with no tax if you survive seven years after making the gift
- Business property relief and agricultural property relief reducing tax on qualifying business assets
Everyone gets £325,000 tax-free, rising to £500,000 if you leave your home to direct descendants. Married couples can combine allowances for up to £1 million tax-free.
Use your £3,000 annual allowance and make larger gifts that become tax-free if you survive seven years. Strategic gifting can dramatically reduce your estate’s value over time.
Business property relief can reduce inheritance tax by up to 100% on qualifying business assets, while agricultural relief protects family farms from tax bills.
Life insurance policies and trust arrangements can provide funds to pay tax bills or remove assets from your estate while maintaining some control during your lifetime.
Allowances correct as of 2025/26 tax year.
Common inheritance tax planning strategies
Life Insurance in Trust
Take out life insurance written in trust to provide funds for inheritance tax bills. The policy proceeds don't form part of your estate and are immediately available to beneficiaries.
Family Home Protection
Ensure your residence nil rate band applies by leaving your home to children or grandchildren. This additional £175,000 allowance can save £70,000 in tax.
Business and Pension Planning
Business property relief can eliminate tax on qualifying business assets. Pensions currently pass tax-free to beneficiaries, though this changes from 2027/28 for most cases.
Do not invest unless you are prepared to loose all the money you invest. This is a high-risk investment and you may not be able to access your money easily and are unlikely to be protected if something goes wrong
HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.
For specialist tax advice, please refer to an accountant or tax specialist.
Trusts are not regulated by the Financial Conduct Authority.
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