Inheritance and estate planning
Inheritance tax planning, so more reaches the people you choose
Inheritance tax is charged at 40% above your allowances, and from April 2027 most unused pensions will count too. Much of it can be planned for, but the best options take years to work.
Why more families are affected
The main inheritance tax allowance, £325,000, has not moved since 2009. Over the same period house prices and investment values have risen substantially. Add savings, investments and, from 6 April 2027, most unused pension funds, and estates that would never have been thought of as wealthy now face a bill.
A couple who leave everything to each other and then to their children can usually pass on up to £1 million free of tax, using both nil-rate bands and both residence nil-rate bands. Beyond that, or for anyone who is single, has no children, or has an estate over £2 million, the tax starts earlier than people expect.
The main ways of reducing it
- Giving during your lifetime. Most gifts fall out of your estate after seven years. Some are exempt at once: £3,000 a year, small gifts of £250, wedding gifts, and regular gifts made from surplus income, which is one of the most useful and least used reliefs.
- Trusts. A trust lets you give assets away while keeping a say over who benefits and when. They are useful and they are complicated, with their own tax charges.
- Life cover in trust. A whole-of-life policy written in trust does not reduce the tax, but provides the money to pay it, outside the estate, so that a home does not have to be sold.
- Business and agricultural relief. Since 6 April 2026 the first £2.5 million of qualifying business and agricultural property attracts 100% relief, with 50% above that.
- Spending in the right order. With pensions coming into the estate in 2027, which pot you draw on first has become an inheritance tax decision as well as an income tax one.
Why this is a job for advice
Every one of those options has a cost. Gifts you later need cannot be taken back. Trusts carry charges and administration. Drawing on a pension to make gifts triggers income tax. An adviser works out how much you can safely afford to give away, models the options against your real figures, and works alongside your solicitor so that the will, the trusts and the investments all point the same way.
What an adviser helps with
Where advice makes the difference
Working out the likely bill
A clear picture of what is in your estate, which allowances apply, and what the tax would be today and after April 2027.
How much you can afford to give
Cash-flow modelling that shows what you need to keep for your own lifetime, including care, before anything is given away.
Gifts and regular giving
Using exemptions properly, keeping the records HMRC expects, and timing larger gifts.
Trusts
Whether one would help, which kind, and how it is taxed, working with your solicitor.
Pensions and the 2027 change
Reviewing nominations and the order in which you draw on pensions, ISAs and other savings.
Cover for what remains
Life insurance written in trust to meet a bill that cannot be planned away.
Calculators
Put a number on it first
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Inheritance
Inheritance tax calculator
Estimate the inheritance tax on your estate, with the residence nil-rate band, gifts and the 36% charity rate.
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Inheritance
Pensions in your estate calculator
What the April 2027 change could add to your family's inheritance tax bill once unused pensions are counted.
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Questions
What people ask us
At what point should I start inheritance tax planning?
Earlier than feels necessary. Gifts take seven years to leave your estate completely, and options narrow with age and health. Many people start in their sixties, when they have a clearer idea of what they will need for themselves.
Can I give my house to my children?
You can, but if you carry on living there without paying a full market rent it is treated as a gift with reservation and stays in your estate. There can also be capital gains tax consequences for your children and risks if their circumstances change. It is rarely as simple as it sounds and needs advice from a solicitor as well as a financial adviser.
Will my pension be subject to inheritance tax?
For deaths on or after 6 April 2027, most unused pension funds and death benefits are included in the estate. Pensions left to a spouse or civil partner remain exempt, and death-in-service benefits are excluded. Our pensions in your estate calculator shows what the change could add.
Do financial advisers write wills?
Wills are drawn up by solicitors or will writers. A financial adviser's part is the planning around it: the numbers, the investments, pensions, trusts and insurance. Advisers in our network work alongside solicitors, and can introduce one if you do not have your own.
This page is general information, not financial advice. WealthWise Connect is an introducer and is not authorised or regulated by the FCA; advice is given by the regulated adviser we introduce. Other areas: Pensions and retirement, Investments and ISAs, Tax planning for high earners, Protecting your family, Business owners, British expats and returners.
The earlier you start, the more options you have.
Book a complimentary video consultation with an FCA-regulated adviser who specialises in estate planning. No obligation.