skip to navigationskip to main content

Inheritance Tax Planning

How Inheritance Tax Works: Thresholds, Rules and Allowances

Clients are often concerned that if they gift property or assets to loved ones after their passing they will be burdening them with unexpected tax bills, but this is usually not the case.

Inheritance tax is the liability of the estate, the person administering the estate or trust is responsible for this, not the person receiving the inheritance. Though what the beneficiaries receive may be reduced by the amount of tax owed.

Inheritance Tax Rules

The standard inheritance tax rate is 40% and is only charged on the part of your estate that’s above the £325,000 threshold.

There’s usually no inheritance tax to pay if;

  1. the value of your estate is below the £325,000 threshold, or
  2. you leave everything above the £325,000 threshold to your spouse, civil partner, a charity or community amateur sports club.

Rules on giving gifts

People often assume that by making gifts of their assets before their passing they can avoid paying inheritance tax, but this too is often not the case. Inheritance tax may have to be paid after your passing on some gifts that you have given depending on;

  • who you give the gift to
  • the value of the gift
  • when the gift was given

Please get in touch for professional advice about what you can give away tax free during your lifetime.

Passing on a home

If you choose to pass your home to your husband, wife or civil partner you will not have to pay any inheritance tax on the property.

If you leave your home to any other person in your will, it will count towards the value of your estate and you will have to pay inheritance tax. However, your tax-free threshold can increase to £500,000 if;

  • you leave your home to your children or grandchildren
  • your estate is worth less than £2 million

As with giving gifts, if you give your home away before you pass, you may still have to pay inheritance tax. Please contact us for more detailed information.

Benefits of Inheritance Tax Planning

Inheritance tax planning can be emotionally challenging, however it’s worth taking the time now to ensure that you and your loved ones get the most out of your estate today and in the future.

There are many benefits of inheritance tax planning;

  1. Minimising potential inheritance tax – The main concern of most of our clients is to minimise their potential inheritance tax liability. By taking a proactive approach to inheritance tax planning now, there are steps that you can take to reduce or even eliminate your inheritance tax bill.
  2. Plan for the future – Understanding the value of your estate now can help you to make informed decision about your future finances and how to distribute your estate.
  3. Support loved ones now – As you review your estate, you may realise that you’re in a better position to help your loved ones now rather than by leaving an inheritance. Supporting children or grandchildren today could have a larger impact than waiting until you pass.

Our Inheritance Tax Planning services

Our tailored inheritance tax planning services enable a smooth transmission of assets whilst looking at ways to minimise your tax liabilities. Our experienced advisors will work with you to provide unique advise specific to your individual circumstances.

Use our inheritance tax calculator to calculate the amount of inheritance tax that you may be liable for.

Find out more

To discuss your requirements in more detail, you can call our team on 01934 412097, email  or complete the form on our contact page and we’ll be in touch shortly.

Other Accountancy Services

We offer a comprehensive range of accountancy services for businesses and individual clients. Click the links below to find out more.


Book your FREE consultation