How can I reduce my inheritance tax bill?

Making plans to reduce your inheritance tax (IHT) can be difficult because emotions and expectations often collide. Think about your situation and start early so you don’t leave it too late.

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Tips to reduce your inheritance tax liability

When you pass on wealth to loved ones, they could be liable to pay inheritance tax. Here are some of the ways you can reduce inheritance tax on your estate, helping you find the right balance between giving money away now and retaining control.

1. Obtain an estate valuation

If you’re worried about IHT, you need to understand the extent of your wealth. Get valuations for all your investments, savings, property etc. The more you know the more you can prepare

2. Know your tax thresholds

Everyone has a nil rate band, below which no IHT is paid. If you’re passing on wealth to a child or grandchild there is an additional main residence nil rate band. It means a married couple or civil partners can pass on up to a million pounds.

3. Consider tax-efficient accounts

Some investment accounts can provide IHT planning benefits. Personal pensions are outside your estate, for example, so can be passed on free from IHT.

4. Think about gifts and charity

Giving away some of your wealth during your life can reduce your tax bill and allow you to see the recipients benefit from your gift. Leaving money to charity in your will can also reduce your estate’s IHT bill.

5. Consider inheritance tax planning advice

Inheritance tax can be complex and using your allowances creatively can reduce the tax burden on your heirs. Talking to a professional can help your structure your wealth to maximise the benefit to your heirs.

6. Discuss your wealth plan with loved ones

Being open about your plans, can avoid ill-feeling and resentment – even challenges to your wishes – once you are no longer here to explain your vision.

What are the potential IHT liabilities on your estate?

Use our IHT calculator to find out how much tax your beneficiaries might have to pay. Speak to our planners to explore how we can help you find efficient ways to pass on your wealth to others.

When to consider inheritance tax planning advice

There are many ways to preserve more of your wealth. Thinking about your financial plan at the earliest opportunity usually allows for the widest range of options; for you, your estate, and your loved ones.

You’d like to reduce the IHT liability on your assets

We’ll help you explore the options for giving money away and leaving it to others in tax-efficient ways.

You don’t want to leave anyone with an unexpected IHT bill

We’ll find ways to organise and structure your assets so there are no surprises when you pass away.

You’re worried that you’ve left IHT planning too late

Although it’s best to start early, we’ll explore all of the options that are available at any stage of life.

You want to understand the latest rules and regulations

We’ll make sure you’re aware of the latest laws surrounding IHT that might impact your assets.

Latest insights

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Choose from our financial planning services

Whether you have a specific question about your money or want ongoing support from a professional, we have a variety of options to help you reduce your potential inheritance tax liability.

Holistic Financial Planning

A carefully designed financial plan can give you the freedom to do even more of the things you want to do and maybe even things you never thought possible.

  • We'll create a financial plan that matches your individual needs and objectives.
  • We can help you become more tax-efficient with your savings with our range of planning tools and techniques.
  • Professional expertise on hand to organise your investments to ensure you are comfortable with your financial decisions.
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OneStep Financial Plans

Each of our Financial Plans provide guidance and streamlined advice around a commonly asked financial question for people with non-complex needs.

  • Choose one of our plans that will provide you with answers to the specific question you had at the start.
  • We will use technology where it helps, with interactive tools and online resources, and people where it matters, so you can speak to an expert.
  • For a one-off fee, our Financial Professionals will help you understand your current situation and give you a clear action plan.
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OneStep Financial Coaching

Gain clarity around your money situation with Financial Coaching. Speak to a real, qualified expert free of charge, who will help you take the next steps with confidence.

  • You’ll speak to a financial coach who has experience dealing with personal finance, investing, retirement and tax questions.
  • Your financial coach will provide useful resources to help you on your way. If you need additional support, we'll recommend the best service to suit your needs.
  • Your first 15 minutes is free, after which you can choose to book a 1-hour coaching session to delve deeper into your financial situation (£150 incl. VAT).
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Gain a better understanding of your current situation and the options available to you. Get in touch today to arrange a free consultation with one of our Financial Professionals.

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Charles Stanley is not a tax adviser.