Inheritance Tax Planning UK —
Protect Your Estate for Future Generations
Proactive IHT planning to minimise the inheritance tax your estate pays — nil rate band optimisation, residence nil rate band, gifts and gifting strategy, trusts, Business Property Relief and Agricultural Property Relief. Keep more for your family, legally.
Inheritance Tax — The Basics & Beyond
Inheritance Tax (IHT) is charged at 40% on the value of your estate above the nil rate band (£325,000) when you die. With house prices and investment values at historic highs, many more families are now caught by IHT than ever before — but with careful planning, the liability can often be significantly reduced or eliminated entirely.
The key to IHT planning is starting early. Many reliefs require assets to be held for a specific period or gifts to have been made more than 7 years before death. Every year you delay planning is potentially tens of thousands of pounds in additional IHT for your family.
The most powerful IHT reliefs are: the nil rate band (£325,000 per person, transferable between spouses), the Residence Nil Rate Band (£175,000 per person when a main residence is left to direct descendants), Business Property Relief (100% exemption for qualifying business interests), Agricultural Property Relief (for qualifying farmland and farm buildings), and the annual gift exemption (£3,000 per year completely free of IHT).
Gifts made more than 7 years before death are completely free of IHT — these are Potentially Exempt Transfers (PETs). Gifts within 7 years may be partly or fully chargeable, with taper relief reducing the IHT on gifts made 3-7 years before death. Planning your gifting strategy years in advance can save your family hundreds of thousands of pounds.
✅ What’s Included
- ✓ Estate valuation & IHT calculation
- ✓ Nil rate band optimisation
- ✓ Residence nil rate band claim
- ✓ Transferable NRB between spouses
- ✓ Annual gifting strategy
- ✓ PET tracking and planning
- ✓ Business Property Relief review
- ✓ Agricultural Property Relief
- ✓ Trust planning advice
- ✓ Life insurance review (in trust)
- ✓ Will structure advice
- ✓ IHT400 estate return preparation
Inheritance Tax — Key Numbers 2024/25
Inheritance Tax — Common Questions
You have several annual IHT-free gifting allowances: £3,000 annual exemption (unused amount can be carried forward one year), £250 per person to any number of people, £5,000 to a child on marriage, £2,500 to a grandchild on marriage, regular gifts from income (any amount, provided they form part of your normal expenditure and don’t reduce your standard of living). Additionally, gifts to UK charities and political parties are exempt. We prepare a personalised gifting strategy maximising all available exemptions.
The Residence Nil Rate Band (RNRB) is an additional IHT nil rate band of up to £175,000 per person available when a main residence (or an equivalent amount from the estate) is left to direct descendants — children, stepchildren, grandchildren. The RNRB is transferable between spouses, so a married couple can potentially have a combined tax-free estate of £1 million (£325,000 NRB × 2 + £175,000 RNRB × 2). The RNRB is tapered for estates above £2 million.
Business Property Relief (BPR) can exempt qualifying business interests from IHT at either 100% (unquoted shares, business property) or 50% (quoted shares with control, land used in a partnership). To qualify, the business must be trading (not investment or property holding), the asset must have been owned for at least 2 years, and the business must not be one mainly holding investments. We assess BPR eligibility carefully — particularly for mixed businesses with investment elements — and advise on structuring to maximise the relief.
Trusts can be powerful IHT planning tools — removing assets from your estate while potentially retaining some benefit from them. Common IHT trust structures include Discretionary Trusts, Loan Trusts, Discounted Gift Trusts and Reversionary Interest Trusts. However, trust law and taxation are complex — trusts have their own registration, tax filing and compliance requirements. We work closely with specialist trust solicitors and advise on whether a trust is appropriate for your specific situation before recommending any structure.
Yes — charitable gifts are completely exempt from IHT. Additionally, if you leave at least 10% of your net estate to registered charities, the IHT rate on the remainder of your estate reduces from 40% to 36%. For larger estates, this reduced rate can result in the family actually receiving more even after the charitable donation — because the IHT saving partially offsets the charitable gift. We model this for clients to determine whether the 10% charitable legacy is beneficial in their specific case.
Protect Your Estate — Start Planning Today
Book a free consultation. The earlier you start IHT planning, the more options are available — every year of delay potentially costs your family thousands in avoidable tax.
Is This Service Right for You?
Homeowners with Properties Above £325,000
With average UK property prices well above the nil rate band in many regions, a large proportion of UK homeowners now have IHT-exposed estates. The Residence Nil Rate Band provides additional relief — but only if correctly structured and claimed.
Business Owners Planning Succession
Business owners planning to pass their business to the next generation need to ensure their business qualifies for Business Property Relief and that the succession is structured tax-efficiently — whether via lifetime gifts, will planning or a trust structure.
Retirees with Investment Portfolios
Individuals with substantial investment portfolios, pension wealth and property face complex IHT positions — particularly as pensions will be brought into IHT from April 2027. Planning now before the rules change is essential.
International Families with UK Assets
Non-UK domiciled individuals with UK assets, and UK-domiciled individuals with overseas assets, face complex IHT positions that require careful treaty analysis and domicile planning. We advise on the IHT implications of both UK and overseas wealth.
Fixed Fees — Agreed Upfront
All Britvex tax fees are fixed and agreed before we start. No hourly rates. Book a free consultation for your exact quote.
All packages include: HMRC agent · dedicated accountant · client portal · 2-hour response guarantee.
The Law That Applies to You
Inheritance Tax Act 1984 (IHTA 1984) — the primary IHT legislation. Defines chargeable transfers, potentially exempt transfers, the nil rate band, agricultural and business property reliefs, charitable exemptions, and the rules for lifetime gifts including the 7-year rule and taper relief. The RNRB is contained in Finance (No.2) Act 2015.
Finance Act 2024 — pension IHT changes — from April 2027, unused pension funds and death benefits will generally form part of the deceased’s estate for IHT. This represents a fundamental change to pension IHT planning — unused pension pots that were previously IHT-free will become part of the taxable estate. We advise all clients with significant pension wealth on the implications.
Business Property Relief (IHTA 1984 s103-s114) — provides 100% IHT relief on qualifying unincorporated businesses and unquoted shares, and 50% relief on quoted shares with control. The trading business test, the 2-year ownership requirement and the investment business exclusion are the most common areas of challenge. HMRC actively challenges BPR claims where there is a significant investment element.
📋 IHT Key Allowances 2024/25
- £325,000 Nil Rate Band — per person
- £175,000 Residence NRB — main home to descendants
- £500,000 Combined NRB+RNRB — single person
- £1,000,000 Combined allowance — married couple
- £3,000 Annual gift exemption per donor
- 40% IHT rate above threshold
- 36% Reduced rate — 10%+ charitable legacy