Examples of IHT planning

• Spouse exemption of a full 100% on the first death if one spouse dies, passing the estate in full to the surviving (UK domiciled) spouse
• On the surviving spouse’s death there is also a potential doubling-up of the £325,000 IHT allowance, potentially increasing the IHT threshold to £650,000

The Government also introduced the Residence Nil-Rate Band (RNRB) worth up to £350,000 to take the value of these two allowances up to £1m dependent on several factors.

An estate will be entitled to the RNRB if:

• The individual dies on or after 6 April 2017
• The individual owns a home, or a share of one, so that it’s included in their estate
• The individual’s direct descendants such as children or grandchildren inherit the home, or a share of it
• The value of the estate is not more than £2 million

An estate can also be entitled to the RNRB when an individual has downsized to a less valuable home or sold or given away their home after 7 July 2015.

The maximum available amount of the RNRB will increase, it is currently set at £175,000.

Any unused RNRB when someone dies can be transferred to the deceased’s spouse or civil partner’s estate. This can also be done if the first of the couple died before 6 April 2017, even though the RNRB wasn’t available at that time.

For estates valued at more than £2 million, the RNRB (and any transferred RNRB) will be gradually withdrawn or tapered away.

• Gifts to UK registered charities attract automatic IHT exemption and there are certain circumstances where the IHT threshold can be reduced from 40% to 36% depending on the number of charitable gifts made in a Will
• Business property, assets and shareholdings attract Business Property Relief and qualify for either a 100% or 50% exemption
• Agricultural land and business assets qualify for either a 100% or 50% exemption

What are the main ways to reduce IHT payable on your Estate?

• Simply, reducing the value of your Estate by giving it away or spending it! You will generally need to survive 7 years from the date of making a gift for it to be excluded from your Estate assets for IHT purposes
• If you are benefiting from a substantial income and if you are not spending that income, you can make regular gifts to others out of your surplus income without triggering the 7-year rule. You can give away £3,000 per year of capital without triggering the 7-year rule. You can make small gifts for weddings, anniversaries etc. We can supply the details
• You can invest assets in financial products such as the AIM market or other innovative structures such as Business Property Relief assets which can be excluded from your estate after two years of ownership. Such structures carry risks and costs, as solicitors, we can only advise you generally on the same and would have to recommend you to a specialist independent financial advisor
• For persons inheriting assets, a Deed of Variation can be executed by the recipient to receive the asset via a Discretionary Trust as a lifetime loan or if the assets being received are not required by the beneficiary, they can be held in trust or advanced down to other beneficiaries, as to avoid the Estate of the beneficiary
• Using Trusts in Wills to protect IHT for your beneficiaries’ estates: see our section on the use of Family Trusts. By using Trust structures in your Wills, IHT can be reduced for subsequent estates such as those of your spouse’s Estate and the Estates of your future generations. Trusts require legal explanation and guidance

Let us help you to review your IHT position

If you would like us to review your IHT position and to advise on steps you can take, we invite you to contact us to make an appointment with one of the lawyers from our private client team.

Our Inheritance Tax Planning team

We have a strong team dedicated to estate and inheritance tax planning, committed to helping you to protect your assets. Our private client lawyers are well informed on the various estate planning options available and offer you advice tailored to your circumstances. We have experienced lawyers available for appointments at all our office locations.

Usman Khan LLB Hons Solicitor and Head of Private Client (Chesham & Amersham)

Johanna Knott BA SFE TEP Senior Associate Solicitor, member of STEP (the Society for Trust and Estate Practitioners) and Solicitors for the Elderly (Chalfont St Giles)

Lucy Pankhurst LLB Hons Associate Solicitor (Stone)

Jeremy Wise Legal Executive & Director

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Our Private Client team provides trusted legal advice and support on personal estate planning, wills, probate, trusts, powers of attorney, and broader private wealth matters. We help clients organise and protect what matters most — your family, your legacy and your peace of mind.

Leading the team is Usman Khan LLB Hons, Solicitor, Head of Private Client, who specialises in wills, estate and inheritance tax planning, trust structures, lasting powers of attorney, and probate and estate administration. Usman brings extensive experience and a clear, supportive style to highly personal legal matters.

Johanna Knott BA SFE TEP, Senior Associate Solicitor – a highly experienced solicitor in private client work, including complex estate planning, trust advisory, Court of Protection matters and administration of estates. Her STEP accreditation reflects her expertise in managing sensitive and high-value private affairs.

Lucy Pankhurst LLB Hons, Associate Solicitor – provides a personable and informed approach to wills, trusts, probate and powers of attorney, often meeting clients in locations that suit their needs.

Jeremy Wise FCILEx, Legal Executive & Director – specialises in Wills and Estate Planning; Powers of Attorney (LPAs) for both Property & Financial and Health & Welfare, and all aspects of Probate and estate administration, including the administration process, advising on both taxable and non-taxable estates, completing and submitting inheritance tax accounts, preparing estate accounts and obtaining the Grant of Probate or Grant of Letters of Administration on intestacy.

This team offers a compassionate and knowledgeable service for individuals and families looking to plan for the future, administer estates, or put robust legal protections in place.