Estate planning helps ensure your wishes are followed and that as much of your estate as possible passes to the people you choose. Inheritance tax (IHT) rules can be complex, and many people don’t realise how allowances apply or how the size of their estate may affect the final tax position.
- What is an ‘estate’? An estate is the total value of everything a person owns, including property, money, investments, and personal possessions, minus any debts they owe.
Allowances are currently frozen and estate values are growing. Thoughtful planning can help reduce your uncertainty, make your intentions clear, and give your family greater financial security.
Why estate planning matters
Estate values can grow over time, and factors such as rising property values, savings, investments, and previous gifts all contribute to your IHT position. From April 2027, unused pension savings may also form part of your estate for inheritance tax, making planning more important than ever.
In addition, allowances, including the nil-rate band (NRB) and the residence nil-rate band (RNRB), may reduce for larger estates, which can increase the amount subject to tax.
Taking action early helps you:
- Understand how the current and future rules apply to you
- Reduce the impact of IHT where possible
- Ensure your wishes are clearly documented
- Provide clarity and peace of mind for your family
How a financial adviser can support you
- Get a clear picture of your estate
A financial adviser will review your assets to give you a clear picture of your estate and how IHT may apply.
- Understand your potential IHT liability
Your financial adviser can calculate your likely tax position and explain how allowances are used, including whether the RNRB may reduce for estates above £2m. Understanding this helps you make informed decisions.
- Explore strategies to reduce or manage IHT
Options may include lifetime gifting, trusts, reviewing how assets are held, planning for later life costs, and using whole of life insurance to create a guaranteed sum for beneficiaries.
Your financial adviser will explain the advantages and considerations of each approach.
- Ensure your plan is affordable
Any planning should fit your long term financial goals. Financial advisers can recommend solutions that remain comfortable and sustainable over time.
- Keep your plan up to date
Estate planning is not a one off exercise. Your financial adviser will review your arrangements regularly to reflect changes in legislation, your financial situation, or your personal wishes.
Take the next step
Estate planning works best when you understand your options and have the right support.
A short conversation with a financial adviser can help you take the first step with confidence. Get in touch and we’ll guide you through your options.
