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Inheritance Tax Planning | Advisers | IHT

Welcome to Assured Private Wealth, your trusted partner in inheritance tax planning. We understand that planning for the future, especially when managing inheritance and tax liabilities, can be daunting. That's why our team of inheritance tax consultants is here to guide you through the process, ensuring your financial assets are protected, and your loved ones are financially secure.

Understanding Inheritance Tax

Inheritance tax (IHT) is crucial when passing on your assets to the next generation. Without proper IHT tax planning, your loved ones may face a substantial tax burden, potentially impacting their financial security. Our dedicated IHT tax advisory team specializes in helping individuals and businesses create effective strategies to minimize IHT liabilities while safeguarding your wealth. 


Here are some key points to understand about inheritance tax in the UK: 

Thresholds: In the UK, a tax-free threshold called the "nil-rate band." As of 2022, the standard nil-rate band was £325,000 per individual. This means that if the total value of your estate is below this threshold, there will be no inheritance tax to pay. 

Residence Nil-Rate Band (RNRB): In addition to the standard nil-rate band, there's an additional allowance called the Residence Nil-Rate Band (RNRB), which applies when you leave your main residence to your direct descendants (e.g., children or grandchildren). As of 2022, the RNRB was £175,000 per individual. This can be added to the standard nil-rate band, potentially increasing the tax-free threshold. 


Exemptions and Reliefs: Some assets and gifts are exempt from inheritance tax. For example, gifts to a spouse or civil partner, registered charities, and certain agricultural or business assets may qualify for exemptions or reliefs. 

Taper Relief: If you die between three and seven years after making a potentially exempt transfer, the tax on that gift is reduced on a sliding scale known as "taper relief." 


Payment and Filing: inheritance tax is usually payable within six months of the end of the month in which the person passed away. Administrators of the estate are responsible for calculating and paying the tax. They must also complete and submit the relevant inheritance tax forms to HM Revenue and Customs (HMRC). 


Trusts: If you've set up trusts as part of your estate planning, they may also be subject to inheritance tax. Different rules apply to trusts, so seeking professional advice is essential. 

Inheritance Tax on Property


In the United Kingdom, inheritance tax can apply to property as part of an individual's estate when they pass away. 


Here's an explanation of how inheritance tax relates to property in the UK: 

Value of Property: When a person in the UK passes away, the value of their property is included as part of their estate for inheritance tax purposes. Property includes the family home and any other residential or non-residential properties they may own. 

Nil-Rate Band and Residence Nil-Rate Band (RNRB): Each individual in the UK is entitled to a Nil-Rate Band, the threshold below which inheritance tax doesn't apply. Also, if an individual passes their main residence to their direct descendants, they may benefit from an additional allowance called the Residence Nil-Rate Band (RNRB). 

Tax on Excess Value: If the total value of the property and the estate exceeds the Nil-Rate Band and RNRB (if applicable), inheritance tax is levied on the amount exceeding these thresholds. 

Lifetime Gifts of Property: If a person gifts property during their lifetime and then passes away within seven years of making the gift, the value of that property may still be subject to inheritance Tax. There are rules and exemptions related to such gifts. 

Exemptions and Reliefs: Some properties may be exempt from inheritance tax, such as the family home, when left to a spouse or civil partner. Certain agricultural or business properties can also qualify for exemptions or reliefs. 


We offer a range of advice and guidance on the most appropriate type of will for your situation and how to execute your wishes. This is yet another aspect of wealth management which appears to be relatively straightforward on the surface, but can very quickly become complicated.

Understanding the Inheritance Tax 7-Year Rule


The UK's 7-Year Rule in inheritance tax planning is a fundamental concept. It primarily pertains to lifetime gifts made by individuals. When someone makes a lifetime gift, it is categorized as a Potentially Exempt Transfer (PET) for inheritance tax purposes, meaning that no inheritance tax is immediately payable on the value of the gift.

The critical aspect of the 7-Year Rule is that a clock starts ticking from the date the gift is made. If the person making the gift survives for a full seven years after making the gift, it becomes entirely exempt from inheritance tax. This implies that if they pass away seven or more years after making the gift, the value of that gift is not included in their estate for Inheritance Tax calculation.

However, the full inheritance tax rate applies if the individual passes away within the first three years of making the gift. For those who pass away between three and seven years after making the gift, a reduced tax rate called "taper relief" applies. This taper relief gradually decreases, making the tax liability progressively lower.

In practice, the 7-Year Rule is crucial for effective inheritance tax planning. Individuals can reduce their estate's overall inheritance tax liability by strategically making lifetime gifts and surviving for seven years.

Nevertheless, it's essential to carefully consider the implications of the 7-Year Rule and consult with inheritance tax financial advisers when making significant gifts to ensure that estate planning aligns with personal goals and circumstances.

Inheritance Tax Planning From Experts


At Assured Private Wealth, we recognize that each client's situation is unique. Our approach begins with an in-depth consultation where we gather information about your assets, financial goals, and aspirations.

Tax Planning Strategies: Our IHT financial consultants understand the intricacies of UK tax laws and regulations. They can devise tailored strategies that allow you to minimize your tax liability legally. These strategies may include using the Nil-Rate Band, RNRB, and other available allowances.
Lifetime Gifting: One common tactic is to make lifetime gifts strategically. However, these gifts may be subject to Inheritance Tax if you don't survive for at least seven years after making them. Our IHT financial advisers can help you navigate this "7-Year Rule" and employ it to your advantage.
Trusts: Trusts can be an essential tool in Inheritance Tax planning. Our inheritance tax planning advisers can guide you in setting up the right type of trust and transferring assets efficiently, often resulting in reduced tax obligations.
Business and Property Transfers: Transferring a family business or agricultural property requires careful planning. Our IHT planning advisers can structure these transfers to minimise Inheritance Tax.
Charitable Giving: Charitable donations can also play a role in reducing Inheritance Tax. Expert inheritance tax financial advice can help you make charitable gifts tax-efficiently.

Questions? Talk to us!

Our Inheritance Tax Expertise


Our inheritance tax planning consultants can:

- Help spouses share their tax-free allowances efficiently.
- Deal with international tax rules and non-domicile issues.
- Sort out tax matters for unmarried couples with assets in different countries.
- Assist with the paperwork for filing inheritance tax returns.
- Offer advice on giving lifetime gifts and what's exempt from tax.
- Plan charitable donations to lower your overall tax.
- Set up trusts and transfer assets to save on taxes.
- Manage the transfer of family businesses and agricultural properties, considering tax implications.
- Guide you through the process of appealing inheritance tax decisions.
- Make the most of tax allowances like the Residence Nil-Rate Band.
- Make sure your wealth is passed down efficiently to the next generation.
- Discuss how trusts can help achieve specific goals.
- Calculate and reduce potential inheritance tax bills.
- Handle inheritance tax for properties you own.
- Find life insurance options to cover inheritance tax.
- Create wills and legacies that minimize your tax bill.

Inheritance Tax Planning FAQs

What is inheritance tax planning?

Inheritance tax planning involves strategising and arranging your financial affairs to minimise the inheritance tax liability on your estate. It ensures that more of your wealth is passed on to your beneficiaries rather than being diminished by taxes.

Why should I consider working with an inheritance tax planning adviser?

Working with an inheritance tax planning adviser can offer several benefits, including expert guidance, personalised strategies, and peace of mind. Advisers like those at Assured Private Wealth can help you navigate complex tax laws, ensuring you make informed decisions.

How can Assured Private Wealth help me reduce my inheritance tax liability?

Assured Private Wealth offers tailored solutions based on your unique financial situation. They can advise on various strategies, such as gifting assets, setting up trusts, and making use of exemptions and reliefs to minimise your inheritance tax liability.

What are the key benefits of professional inheritance tax planning?

Expertise and Knowledge: Inheritance tax laws are complex and constantly changing. A professional adviser at Assured Private Wealth stays up-to-date with the latest regulations and can offer informed advice.

Personalised Planning: Each individual’s financial situation is unique. Assured Private Wealth provides customised plans that align with your specific goals and circumstances.

Tax Efficiency: By implementing effective tax planning strategies, you can significantly reduce the amount of inheritance tax payable, ensuring more of your estate is preserved for your loved ones.

Peace of Mind: Knowing that your estate is in order and that you’ve taken steps to minimise tax liability can provide peace of mind for you and your family.

What specific strategies can Assured Private Wealth employ to help with inheritance tax planning?

Gifting: Advisers can help you understand the benefits of gifting assets during your lifetime to reduce the value of your estate.

Trusts: Setting up trusts can be an effective way to manage and protect your assets while reducing tax liability.

Exemptions and Reliefs: Assured Private Wealth will ensure you make full use of available exemptions and reliefs, such as the annual gift allowance and business property relief.

Life Insurance: They can advise on life insurance policies written in trust to cover potential inheritance tax liabilities.

Is inheritance tax planning only for the wealthy?

No, inheritance tax planning is beneficial for anyone with an estate above the tax-free threshold. Proper planning can ensure that your beneficiaries receive the maximum possible inheritance, regardless of the size of your estate.

How do I start the inheritance tax planning process with Assured Private Wealth?

You can begin by scheduling a consultation with one of Assured Private Wealth’s experienced advisers. They will assess your financial situation, discuss your goals, and develop a tailored plan to meet your needs.

Can inheritance tax planning also help with estate planning?

Yes, inheritance tax planning is an integral part of estate planning. Assured Private Wealth can help you create a comprehensive estate plan that includes wills, trusts, and other legal instruments to manage and protect your assets.

What makes Assured Private Wealth different from other inheritance tax planning advisers?

Assured Private Wealth is known for its personalised approach, expert knowledge, and commitment to client satisfaction. Their advisers take the time to understand your unique situation and provide bespoke solutions to meet your goals.

Are there any risks associated with inheritance tax planning?

While there are risks in any financial planning, working with a reputable firm like Assured Private Wealth can mitigate these risks. Their expertise ensures that strategies are implemented correctly and compliantly, minimising potential issues.

Want to know more?

Call us for a friendly chat on 02380 661 166 or email: info@apw-ifa.co.uk

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