Inheritance Tax (IHT) planning is becoming an increasingly important part of financial planning for many families. With asset values rising, allowances frozen and proposed changes to pension taxation on the horizon, estates that may not previously have faced an IHT liability could now be exposed to it.

At our recent Investments & Planning Event, we discussed how these changes are reshaping the IHT landscape and why it’s no longer just an issue for the very wealthy.

Inheritance Tax is no longer just a “wealthy family” problem

With frozen IHT thresholds and rising asset values, more families are being drawn into the IHT net.

• Estates above £325,000 (or £500,000 with the Residence Nil‑Rate Band) may face IHT.
• Married couples and civil partners can pass on up to £1 million, but only with careful planning.
• Doing nothing is often the most expensive option.

Key point : Early awareness and planning are now essential.

Pensions are becoming a major IHT risk

Pensions have traditionally been one of the most tax‑efficient assets to pass on. That may soon change.

• Currently, pensions sit outside the estate for IHT.
• Proposed changes from April 2027 could bring unused pensions into the IHT calculation.
• This could create effective tax rates of over 60% in some cases.

Key point : Pensions should be actively planned for legacy purposes, not left on autopilot.

The 7‑year gifting rule is powerful – but often misunderstood

Lifetime gifting remains one of the most effective IHT tools when used correctly.
Key points covered at the seminar included:

• Gifts survive IHT after 7 years
• Taper relief applies after 3 years
• Allowances such as:
  • £3,000 annual exemption
  • Small gifts
  • Gifts out of surplus income

Key point : Good record‑keeping and timing make all the difference.

There are IHT mitigation solutions beyond “giving money away”

For those who need to retain access or income, the seminar explored structured solutions including:

• Business Relief qualifying investments (potential IHT relief after 2 years)
• Gift & Loan Trusts
• Discounted Gift Trusts
• Reversionary Interest Trusts

Key point : Effective IHT planning doesn’t have to mean losing control or income.

IHT planning is not a one‑off exercise

Rules change, family circumstances evolve, and assets grow or fall in value.
The biggest takeaway:

• IHT planning should be reviewed regularly.
• Wills, pension nominations and expressions of wish must stay up to date.
• Planning early reduces tax, stress and family friction later on.

Key point : Good IHT planning is about clarity, flexibility and peace of mind.

For clients where Inheritance Tax is likely to be a consideration, these points will form part of our ongoing planning conversations. That said, if this blog has prompted questions or you would like an earlier discussion about your own circumstances, please feel free to get in touch at any point.

Thanks for reading and #enjoythejourney