You can reduce the value of your estate by making gifts. These are exempt from IHT if you survive for seven years after making them.

• Annual Exemption: Gift up to £3,000 each tax year without incurring IHT. Unused allowances can be carried forward one year.
• Small Gifts: Give up to £250 per person per tax year.
• Wedding or Civil Partnership Gifts: Gift up to £5,000 for your child’s wedding, £2,500 for grandchildren, or £1,000 for others.

If you have surplus income, regular gifts made from this income can be exempt from IHT. Proper documentation is required to prove the gifts don’t affect your standard of living.

Placing assets into a trust can help remove them from your taxable estate while allowing you to retain some control over how they are distributed. Trusts are especially useful for:

• Protecting assets for children or vulnerable beneficiaries.
• Mitigating IHT on property or business assets.

Leaving 10% or more of your estate to charity reduces the IHT rate from 40% to 36%.

Certain business assets qualify for 50% or 100% relief, depending on the type of asset. This can make them entirely or partially exempt from IHT.

A life insurance policy placed in trust ensures the payout doesn’t form part of your taxable estate. This can cover IHT liabilities, preventing the need to sell assets like property.

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IHT planning is most effective when started early. Strategies like gifting and trusts often require several years to realise their full benefits. The 7-year rule for gifts, for instance, means you need to survive seven years for the gift to be fully exempt from IHT.

Inheritance Tax (IHT) planning can be daunting, but a financial adviser can provide invaluable guidance to make the process easier and more effective. Here’s how they can help:

A financial adviser will thoroughly review your estate to identify potential IHT exposures. By understanding the total value of your assets, including property, savings, investments, and pensions, they can calculate how much tax your estate might face and where savings can be made.

Every individual’s financial goals and family circumstances are different. An adviser will create a tailored strategy to minimise your estate’s IHT liability while ensuring your wealth is distributed according to your wishes. This might involve a mix of gifting, trusts, or other tax-efficient tools designed specifically for your needs.

Advisers have the expertise to help you utilise trusts, business relief, and other legal tools effectively. They’ll guide you through the complexities of gifting, setting up trusts, or restructuring your estate to maximise exemptions while maintaining control over your assets.

Tax regulations frequently change, and an adviser ensures your plan remains compliant and optimised over time. Whether it’s responding to new laws or adapting your strategy to shifts in your personal circumstances, they’ll keep your estate planning up to date.

Working with a financial adviser ensures you can confidently safeguard your wealth for future generations while reducing unnecessary tax burdens.

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