Inheritance Tax Planning

Inheritance Tax (IHT) is charged at the rate of 40% when you die on all your assets in your estate that exceed the 'nil-rate band' (currently £325,000). 

Due to an increase in property values over recent years, many people find that they now fall into the tax net. So if you own your home worth £325,000 and £100,000 of cash, your estate will pay tax of £40,000. This is why inheritance tax planning is so important. There are two ways to do some IHT planning - either during your lifetime or in your Will.


Inheritance Tax Planning During Your Lifetime 

There are various things you can think about doing during your lifetime that will reduce the IHT payable when you die. Think about:

  • Whether you have cash or other assets that you don't need, which you can afford to give away,
  • Whether you have extra income that you don't need which you can afford to give away
  • Your investments - certain types of investment give tax relief or have a better IHT treatment when you die

Remember that before you do anything, you are always best to get some inheritance tax advice from an inheritance tax solicitor first. By doing something like giving an asset away to reduce your IHT bill, you could find you create another tax charge, such as capital gains tax.  Wouldn't you prefer to pay a small amount of legal fees now to find this out, than saddle yourself with a much bigger capital gains tax bill in a few months time?


Planning For Inheritance Tax In Your Will

It is possible to create a Trust in your Will that will help reduce the IHT payable when you die.  This is often known as a 'nil rate band discretionary Trust'. Lots of people think they have no use anymore since the law changed a couple of years ago. Actually, there are still lots of good reasons for creating a Trust like this in your Will, a couple of which are:

  • The Trust may help protect your spouse from paying nursing home charges in the future,
  • The Trust protects your children if your spouse goes on to remarry in the future 

Be informed - talk through your Will choices first with your solicitor to be certain you are doing what's right for you and your family - both now and in the future.


More Inheritance Tax Advice

Some aspects of IHT planning involve thinking about particular investments which help you plan for the future. We work very closely with a number of Independent Financial Advisors (IFA's) in order to make sure our clients are receiving the full service they need to understand how we can help and what options they have available to them. You can click through to one of our IFA recommendations to the left of this page, or alternatively, we have a network of Independent Financial Advisors we can introduce you to.


Contact us About Inheritance Tax

Call us today for a free no obligation chat about inheritance tax on 0800 590019 to talk to a member of our team at your local office in Newcastle, Durham, Darlington, Tynemouth or Stockton in Teesside.

Alternatively please email your details to or fill in the online initial enquiry form below and one of our Team will contact you within 24 hours.


Karen Pratt Partner