Inheritance Tax Threshold 1 Million: Safeguard Your Family’s Future

Protecting your estate from unnecessary inheritance tax (IHT) is one of the most important steps you can take to secure your family’s future. It’s not something reserved for the ultra-wealthy — with the average home in England now worth around £290,000, ordinary homeowners are increasingly caught by IHT. Trusts are not just for the rich — they’re for the smart.

Currently, the UK inheritance tax threshold — known as the nil rate band (NRB) — is £325,000 per person, with an additional residence nil rate band (RNRB) of £175,000 available when a qualifying home is left to direct descendants such as children or grandchildren. For a married couple or civil partners, these allowances can be combined to create a combined threshold of up to £1 million.

By planning your estate effectively, you can safeguard your legacy and provide for your loved ones. At MP Estate Planning, we help families navigate the complexities of inheritance tax planning and create a personalised plan that suits their needs. England invented trust law over 800 years ago, and it remains one of the most powerful tools available for protecting families — when used by the right specialist.

Key Takeaways

• The combined IHT threshold for a married couple can reach £1 million — but only if specific conditions are met, including leaving a qualifying home to direct descendants.
• The nil rate band has been frozen at £325,000 since 2009 and is confirmed frozen until at least April 2031 — meaning more families are caught by IHT every year due to rising property values.
• Lifetime trusts, gifts, and reliefs can be used to reduce your estate’s IHT exposure, but they require careful planning years in advance.
• Professional specialist advice is essential — the law, like medicine, is broad. You wouldn’t want your GP doing surgery.
• Taking proactive steps now will put your mind at rest and help protect your family’s finances for the long term.

Want to protect your estate from unnecessary inheritance tax? Fill out our contact form, call us at 0117 440 1555, or book a call with our team of specialists today.

Understanding Inheritance Tax in the UK

Understanding the intricacies of inheritance tax is crucial for safeguarding your family’s financial future. Inheritance tax is a tax levied on the estate of someone who has died — that includes property, savings, investments, pensions (from April 2027), and possessions. As we guide you through the complexities of UK inheritance tax rules, you’ll gain a clearer understanding of how to protect your assets and keep more of your wealth within the family.

What is Inheritance Tax?

Inheritance tax (IHT) is charged at 40% on the value of a deceased person’s estate that exceeds the nil rate band (NRB) of £325,000. There is also a residence nil rate band (RNRB) of £175,000 available when a qualifying home is passed to direct descendants — children, grandchildren, or step-children. This means an individual could potentially pass on up to £500,000 free of IHT, and a married couple or civil partners could pass on up to £1 million when both allowances are fully utilised. A reduced IHT rate of 36% applies if you leave 10% or more of your net estate to charity.

Current Rate and Thresholds

The nil rate band of £325,000 has been frozen since 6 April 2009 and is confirmed frozen until at least April 2031. This is the single biggest reason ordinary homeowners are now being caught by IHT — house prices have risen significantly while the threshold has not moved in over 15 years. The RNRB of £175,000 is also frozen until April 2031. Combined, a married couple can potentially shelter up to £1 million from IHT (£650,000 NRB + £350,000 RNRB) — but only if the right conditions are met. It’s important to note that the RNRB starts to taper away by £1 for every £2 that the estate value exceeds £2 million. For more detailed information on inheritance tax planning in the UK, our specialists are available to advise.

Key Exemptions to Consider

Several exemptions can reduce your IHT liability, and understanding them is key to effective inheritance tax planning:

• Spouse/civil partner exemption: Assets passed between spouses or civil partners are completely exempt from IHT — there is no limit. Any unused NRB and RNRB can also transfer to the surviving spouse.
• Potentially Exempt Transfers (PETs): Gifts to individuals become fully exempt from IHT if the donor survives for seven years after making the gift.
• Charity exemption: Gifts to registered charities are fully exempt from IHT. Leaving 10% or more of the net estate to charity reduces the IHT rate on the remainder from 40% to 36%.
• Annual gift exemption: Each person can give away £3,000 per tax year free of IHT, with one year’s carry-forward if unused. Small gifts of up to £250 per recipient per year are also exempt (though you cannot combine both exemptions for the same person).
• Normal expenditure out of income: Regular gifts made from surplus income (not capital) can be exempt — but they must be documented carefully to satisfy HMRC.

Our team is available to advise on your options for protecting your family finances and assets for the long term. By understanding the current rates, thresholds, and exemptions, you can make informed decisions about your estate.

The Inheritance Tax Threshold of £1 Million

Understanding the £1 million inheritance tax threshold is crucial for families looking to safeguard their assets. The £1 million figure is widely referenced in the media, but it’s important to understand exactly how it works — because it’s not a flat threshold that applies to everyone automatically.

How the Threshold Works

The £1 million figure is only achievable by a married couple or civil partners, and only when all of the following conditions are met:

• Both spouses have a full nil rate band of £325,000 each (total £650,000)
• Both spouses qualify for the full residence nil rate band of £175,000 each (total £350,000)
• A qualifying residential property is being passed to direct descendants — children, grandchildren, or step-children
• The total estate value does not exceed £2 million (above which the RNRB begins to taper)

For a single person, the maximum is £500,000 (£325,000 NRB + £175,000 RNRB). And the RNRB is not available at all if the home is left to siblings, nephews, nieces, friends, or charities. To learn more about how this threshold applies to your situation, you can visit our page on how much inheritance tax you’ll pay on £1 million.

The Importance of the Banding System

IHT operates on a simple banding system: 0% on the portion of the estate within the available nil rate bands, and 40% on everything above. There’s no graduated scale — once you exceed your available thresholds, every additional pound is taxed at 40%.

Let’s put that in real terms. A single person with an estate worth £700,000, qualifying for both the NRB and RNRB, would have a tax-free threshold of £500,000. The remaining £200,000 would be taxed at 40%, meaning an IHT bill of £80,000. For a married couple with a combined estate worth £1.2 million and full use of both allowances, the taxable amount would be £200,000 — resulting in an IHT bill of £80,000.

However, by utilising effective planning strategies such as lifetime trusts, targeted gifting, and proper use of reliefs, you can significantly reduce or even eliminate the amount of IHT payable — ensuring that your loved ones receive more of your estate.

We can help you navigate the complexities of the inheritance tax system and develop a personalised plan to protect your family’s future. Plan, don’t panic.

Common Misconceptions About Inheritance Tax

There’s a lot of confusion surrounding inheritance tax, and it’s time to set the record straight. Many people believe that IHT is a tax on the beneficiaries, but in reality, it’s paid by the estate — from the deceased person’s assets — before anything is distributed. This misunderstanding can lead to unnecessary worry and, worse, a failure to plan.

Debunking Myths: Who Really Pays?

A common myth is that IHT only affects the very wealthy. While most estates currently fall below the available thresholds, the number of families caught by IHT is growing every year because the nil rate band has been frozen at £325,000 since 2009, while property values have continued to rise. The average home in England is now worth around £290,000 — meaning a homeowner with modest savings, a pension, and a life insurance policy can easily breach the threshold.

Here are the key facts to understand:

• IHT is paid by the estate before assets are distributed to beneficiaries — your executors or administrators handle this.
• Only the portion of the estate above the available thresholds (NRB of £325,000, plus RNRB of £175,000 where applicable) is subject to IHT at 40%.
• Inheritance tax reliefs such as Business Property Relief (BPR) and Agricultural Property Relief (APR) can significantly reduce the tax liability for qualifying assets — though from April 2026, BPR and APR will be capped at 100% for the first £1 million of combined business and agricultural property, with 50% relief on the excess.

The Role of Gifts and Trusts

Gifts and trusts are two of the most effective tools for reducing your estate’s IHT exposure — but they work in very different ways, and it’s crucial to understand the distinctions.

Gifts: When you give an asset directly to an individual, it is classified as a Potentially Exempt Transfer (PET). If you survive for seven years after making the gift, it falls entirely outside your estate for IHT purposes. However, if you die within seven years, the gift may use up some or all of your nil rate band, with any excess taxed at 40% (subject to taper relief after three years). It’s important to note that gifts must be genuine — if you gift your home but continue living in it rent-free, it’s treated as a gift with reservation of benefit (GROB) and remains in your estate for IHT regardless of how long you survive.

Trusts: England invented trust law over 800 years ago, and trusts remain one of the most powerful planning tools available. By placing assets into a properly structured lifetime trust, you can remove them from your estate while retaining certain controls through your role as a trustee. A trust is not a separate legal entity — it is a legal arrangement where trustees hold assets on behalf of beneficiaries according to the terms of the trust deed. The most commonly used type — and the one we use at MP Estate Planning — is the discretionary trust, where trustees have absolute discretion over how and when assets are distributed to beneficiaries. This is key: because no beneficiary has a legal right to the trust assets, those assets are protected from IHT on the beneficiaries’ deaths, from divorce claims, and from local authority care fee assessments.

Our specialists are here to help you protect your estate and assets. By understanding the myths and realities of inheritance tax, you can make informed decisions to safeguard your family’s future.

Planning Your Estate to Minimise Tax Liability

Effective estate planning is crucial for minimising inheritance tax liabilities and securing your family’s financial future. The key is to start early and work with a specialist who understands the nuances of trust law and IHT — not a generalist. As we say at MP Estate Planning: the law, like medicine, is broad. You wouldn’t want your GP doing surgery.

Effective Estate Planning Strategies

To minimise inheritance tax, you need to consider a range of strategies — and they need to be tailored to your specific circumstances. There is no one-size-fits-all solution. The most effective approaches include:

• Making gifts to individuals: Gifts to individuals are Potentially Exempt Transfers (PETs) and fall out of your estate after seven years. Use your annual exemption of £3,000 per year, plus small gifts of £250 per person (not combined with the £3,000 for the same recipient), and wedding gifts (£5,000 from a parent, £2,500 from a grandparent, £1,000 from anyone else).
• Using lifetime trusts to hold assets: Placing your property or other assets into a properly structured discretionary trust can remove them from your estate, protect them from care fees and divorce, and bypass probate delays entirely. Transfers into trust are Chargeable Lifetime Transfers (CLTs), but for most family homes below the £325,000 NRB, there is no entry charge at all.
• Taking advantage of reliefs and exemptions: Business Property Relief, Agricultural Property Relief, the spouse exemption, charity exemption, and normal expenditure out of income can all significantly reduce your IHT liability.

By implementing these strategies early, you can significantly reduce your estate’s tax liability. For instance, inheritance tax planning in Hampstead can provide personalised solutions to suit your specific situation.

Using Trusts to Protect Your Wealth

A trust is a legal arrangement — not a separate legal entity — where trustees hold assets on behalf of beneficiaries according to the terms set out in the trust deed. The trustees are the legal owners of the trust assets, but they hold them for the benefit of the beneficiaries. The settlor (the person who creates the trust) can also be a trustee, meaning they remain involved in decisions about the trust assets. At MP Estate Planning, our trusts use irrevocable structures with “standard and overriding powers” — giving trustees defined flexibility without making the trust revocable, which would undermine the IHT benefits entirely. A revocable trust provides no IHT benefit because HMRC treats the assets as still belonging to the settlor.

Key benefits of using trusts include:

1. Bypass probate delays: Trust assets do not need to go through the probate process. While sole-name assets can be frozen for months (the full probate process typically takes 3-12 months, longer with property sales), trustees can act immediately on the settlor’s death.
2. IHT efficiency: Assets properly placed in an irrevocable discretionary trust are outside the settlor’s estate for IHT, provided the settlor has not reserved a benefit and the relevant time periods have elapsed.
3. Protection from threats: Discretionary trusts protect assets from beneficiaries’ divorces (with a divorce rate of around 42% in the UK, this matters), creditor claims, and local authority care fee assessments — because no beneficiary legally “owns” the trust assets. When asked about the family home, the answer is simply: “What house? I don’t own a house.”
4. Privacy: Unlike a will, which becomes a public document once a Grant of Probate is issued, the trust deed remains private. The Trust Registration Service (TRS) is not publicly accessible — unlike Companies House.

When you compare the cost of setting up a trust — from £850 for straightforward arrangements — to the potential costs of care fees (currently averaging £1,200-£1,500 per week) or a 40% IHT bill, it’s one of the most cost-effective forms of protection available. A trust costs the equivalent of roughly one to two weeks of care fees — a one-time investment versus ongoing costs that can deplete an estate down to £14,250. Our team is experienced in helping clients navigate the complexities of trust planning, and we can advise on the best options for your specific circumstances.

The Importance of Professional Advice

Professional specialist advice is crucial when it comes to managing inheritance tax liabilities and securing your family’s future. This is not an area where a generalist approach works — you need someone who specialises in trust law, IHT, and estate planning under English and Welsh law.

Expert Guidance for Estate Planning

At MP Estate Planning, we use our proprietary Estate Pro AI — a 13-point threat analysis — to identify the specific risks facing your estate. Every family is different, and the right strategy depends on your assets, your family structure, and your goals. Generic advice from a high-street solicitor who handles conveyancing, divorces, and wills may miss critical opportunities — the law, like medicine, is broad, and you need a specialist.

Some key benefits of working with estate planning specialists include:

• A personalised analysis of your estate’s exposure to IHT, care fees, probate delays, and family disputes
• Expert knowledge of current UK tax law, including recent changes to BPR, APR, and pension IHT treatment from April 2027
• Strategies for reducing inheritance tax liabilities that are legally robust and tailored to your situation

Legal Expertise in Estate Planning

Specialist legal expertise in trust law and IHT planning is essential because the detail matters. A trust deed that is poorly drafted can fail to achieve its purpose, leaving your family exposed to the very threats you were trying to protect against. Here’s what specialist legal expertise brings to the table:

By combining specialist trust law knowledge with a thorough understanding of your personal circumstances, you can ensure that your estate is planned effectively, minimising tax liabilities and securing your family’s future. SPEAK TO THE TEAM today to learn more about how our experienced professionals can help you.

Impact of Changes in Legislation

Understanding the impact of legislative changes on inheritance tax is vital for effective estate planning. The IHT landscape in the UK is shifting, and families who planned years ago may need to revisit their arrangements in light of recent and upcoming changes.

Recent Changes to Inheritance Tax Rules

Several significant changes to UK inheritance tax rules have been announced or are coming into effect in the near future:

• Frozen nil rate bands: Both the NRB (£325,000) and the RNRB (£175,000) are confirmed frozen until at least April 2031. With house prices and inflation continuing to rise, this freeze is dragging more ordinary families into the IHT net every year — a process often called “fiscal drag.” The NRB has not increased since 6 April 2009 — over 15 years of erosion by inflation.
• Changes to Business Property Relief and Agricultural Property Relief from April 2026: BPR and APR will be capped at 100% relief for the first £1 million of combined qualifying business and agricultural property. Above that threshold, relief will be reduced to 50%. This is a major change affecting farming families and business owners who previously benefited from unlimited 100% relief.
• Inherited pensions from April 2027: Inherited pension pots — including SIPPs and other registered pension schemes — will become liable for IHT for the first time. This means that pensions, previously one of the most IHT-efficient assets to leave, will need to be factored into estate planning in an entirely new way.

Predictions for Future Changes

While predicting future changes with certainty is impossible, the direction of travel is clear: the government is steadily broadening the IHT net. Areas to watch include:

• Potential further restrictions to reliefs and exemptions, particularly the RNRB, which has been criticised as overly complex and restrictive in who qualifies.
• Possible changes to the treatment of trusts — though discretionary trusts under the relevant property regime are already one of the most transparent and well-regulated planning tools available under UK law.
• The ongoing freeze of the NRB — with no indication it will be increased before April 2031 at the earliest, the number of estates liable for IHT will continue to grow year on year.

We are here to help you navigate these changes and ensure your estate plan remains effective. Keeping families wealthy strengthens the country as a whole — and the best time to plan is before changes take effect, not after.

The Role of Life Insurance in Inheritance Tax Planning

Life insurance plays a pivotal role in inheritance tax planning — but only if it’s set up correctly. A life insurance policy that pays out into the deceased’s estate will itself be subject to 40% IHT. However, a policy written into trust avoids this entirely, because the payout goes directly to the trustees rather than forming part of the estate.

Why Consider Life Insurance?

Life insurance can serve two key purposes in IHT planning. First, it can provide a lump sum specifically designed to cover the anticipated IHT bill, meaning your beneficiaries don’t have to sell the family home or other assets to pay the tax. Second, when written into a Life Insurance Trust, the payout bypasses both IHT and probate entirely — your trustees can distribute the funds immediately, without waiting months for a Grant of Probate.

Key benefits of using life insurance for inheritance tax planning include:

• Providing an immediate cash sum to cover IHT liabilities, preventing the forced sale of property or other assets
• When written into trust, the payout is outside the estate for IHT — meaning HMRC doesn’t take 40% of your insurance payout
• Bypassing probate delays — trustees can access the funds immediately upon death
• At MP Estate Planning, Life Insurance Trusts are typically set up at no additional cost when arranged as part of your estate plan

Choosing the Right Policy

Selecting the appropriate life insurance policy requires careful consideration of your circumstances and goals. The most common types used for IHT planning are whole-of-life policies (which guarantee a payout whenever you die) and term assurance policies (which cover a fixed period, such as 7 years to cover PET exposure). The critical step is ensuring the policy is written into trust from the outset — retrofitting it later can be more complex.

Our specialists are here to guide you through the process, ensuring that you find a policy that meets your specific requirements and provides peace of mind for you and your loved ones. Not losing the family money provides the greatest peace of mind above all else.

Maximising Allowances and Reliefs

Maximising your estate’s available allowances and reliefs is a key strategy in minimising inheritance tax liability. Doing the right thing for your family now will put your mind at rest, knowing that you have taken steps to protect their future.

Various reliefs are available to reduce IHT liabilities, and understanding which ones apply to your circumstances is crucial for effective planning.

Key Reliefs to Be Aware Of

There are several key reliefs that can significantly impact your IHT liability:

• Business Property Relief (BPR): Currently provides up to 100% relief on qualifying business assets, effectively removing them from the estate for IHT purposes. However, from April 2026, 100% relief will be capped at the first £1 million of combined business and agricultural property, with 50% relief on the excess. The business must be a trading business (not primarily an investment business), and the assets must typically have been owned for at least two years.
• Agricultural Property Relief (APR): Similar to BPR, APR can provide up to 100% relief on the agricultural value of qualifying farmland and related assets. The same April 2026 cap applies. The property must have been occupied for agricultural purposes for at least two years (if farmed by the owner) or seven years (if let to a tenant).
• Spouse/Civil Partner Exemption: Transfers between spouses or civil partners are completely exempt from IHT with no upper limit. Additionally, any unused NRB and RNRB can transfer to the surviving spouse, potentially doubling the available thresholds to £1 million.
• Charity Exemption: Gifts to registered charities are exempt from IHT. Leaving 10% or more of the net estate to charity reduces the IHT rate on the taxable remainder from 40% to 36%.

It’s essential to understand the specific conditions and rules surrounding each relief to ensure you can benefit from them. Getting this wrong can be extremely costly — and getting it right requires specialist advice.

Tapering Relief and Its Impact

Taper relief is an important but widely misunderstood element of IHT planning. It applies to gifts made between three and seven years before the donor’s death — but here’s the crucial point that many people miss: taper relief reduces the amount of TAX payable, not the value of the gift. And it only comes into play when gifts exceed the available nil rate band (£325,000).

Here’s how taper relief works in practice:

• 0-3 years before death: No taper relief — full 40% IHT rate applies to the chargeable amount above the NRB
• 3-4 years: Tax reduced to 32%
• 4-5 years: Tax reduced to 24%
• 5-6 years: Tax reduced to 16%
• 6-7 years: Tax reduced to 8%
• 7+ years: Gift falls entirely outside the estate — 0% IHT

For most families, the real goal is surviving the full seven years so that gifts and transfers become completely exempt. Taper relief is a useful backstop, not a planning strategy in itself.

By maximising allowances and reliefs with the help of a specialist, you can significantly reduce your inheritance tax liability, ensuring more of your estate is passed to your loved ones.

Family Home and Inheritance Tax

The family home plays a central role in inheritance tax planning. For many families across England and Wales, the home is by far their most valuable asset — with the average home in England now worth around £290,000, it can represent the bulk of an estate’s value and the primary source of IHT exposure.

Principal Private Residence Relief

It’s important to understand that Principal Private Residence Relief (PPR) is a Capital Gains Tax (CGT) relief, not an IHT relief. PPR exempts gains on the sale of your main home from CGT while you are alive — and this is relevant when transferring your home into a lifetime trust, as PPR typically applies at the point of transfer, meaning no CGT is triggered. However, PPR does not reduce your IHT liability — your home’s full market value at the date of death is included in your estate for IHT purposes if you still own it.

The relief that specifically helps with the family home and IHT is the Residence Nil Rate Band (RNRB), which provides an additional £175,000 allowance per person — but only when a qualifying residential property is left to direct descendants (children, grandchildren, or step-children). The RNRB is not available when the home is left to siblings, nephews, nieces, friends, or charities. It’s also important to keep records of property ownership and residence history to support any claims.

Planning for Property Disposition

Planning for the disposition of your property is one of the most critical aspects of IHT planning — and one of the areas where mistakes are most costly. There are several approaches to consider:

Leaving the home through your will: This is the simplest approach and preserves the RNRB. However, the property will go through probate (meaning it’s frozen until a Grant of Probate is issued), it becomes part of a public record, and it remains vulnerable to IHT, care fee depletion, and beneficiary divorce.

Placing the home into a lifetime trust: This is where specialist planning comes into its own. At MP Estate Planning, our Family Home Protection Trust (Plus) is specifically designed to protect the home from care fees, bypass probate delays, and retain IHT reliefs including the RNRB. For properties without a mortgage, this involves transferring the legal title to the trustees using a TR1 form, with a Form RX1 restriction registered at the Land Registry. For properties with a mortgage, a Declaration of Trust transfers the beneficial (equitable) interest while the legal title stays with the mortgagor — as the mortgage reduces and the property value rises, the trust’s interest grows. The distinction between legal and beneficial ownership is the very foundation of English trust law, which has existed for over 800 years.

Our team can help you protect your family finances and assets by providing guidance on the best strategies for your situation — whether that’s a simple will-based plan or a comprehensive trust arrangement.

For more information on inheritance tax planning in specific regions, you can visit our page on inheritance tax planning in Bradford.

Strategies for Business Owners

Protecting your business legacy requires careful planning, especially when it comes to navigating UK inheritance tax rules. As a business owner, you’re not just concerned about the present success of your company, but also ensuring it can be passed on intact to the next generation. With the upcoming changes to Business Property Relief from April 2026, planning has never been more urgent.

One of the key strategies for reducing inheritance tax liabilities is understanding and utilising Business Property Relief (BPR). BPR can significantly reduce the IHT payable on your business assets — but it’s crucial to understand both the qualifying criteria and the new limitations that are coming into force.

Business Property Relief Explained

BPR currently provides up to 100% relief on qualifying business assets, effectively removing them from your estate for IHT purposes. However, from April 2026, 100% relief will be capped at the first £1 million of combined qualifying business and agricultural property. Above that threshold, relief will be reduced to 50% — meaning the excess will be taxed at an effective rate of 20% (half of 40%). This is a significant change for many business owners and farming families.

To qualify for BPR, the business must have been owned for at least two years prior to death, and it must be a genuine trading business rather than one that is primarily holding investments. HMRC scrutinises BPR claims carefully, so proper documentation and planning are essential.

Succession Planning for Business Owners

Succession planning is another critical aspect of protecting your business legacy. It involves planning for the transfer of your business to the next generation or other successors, ensuring continuity and minimising potential disputes. Key considerations include:

• Whether to transfer the business during your lifetime (using trusts or direct gifts) or through your will
• Ensuring the business structure qualifies for BPR and maintaining that qualification — HMRC can challenge this if the nature of the business changes
• Using a shareholders’ agreement or partnership agreement that addresses what happens on death
• Considering life insurance written into trust to fund any IHT liability or provide equalisation for beneficiaries who don’t inherit the business
• For investment properties such as buy-to-lets that don’t qualify for BPR, consider a Settlor Excluded Asset Protection Trust to remove them from your estate

For expert guidance on succession planning and Business Property Relief, we recommend visiting our detailed guide on inheritance tax planning in Barnes. Our specialists are here to help you safeguard your legacy.

When to Start Your Estate Planning

The short answer is: now. The longer you wait, the fewer options you have — and some of the most effective strategies (like the 7-year rule for gifts and transfers) literally require time to work. Starting your estate planning early is key to minimising inheritance tax liabilities and ensuring that the full range of reliefs and allowances are available to your family.

Maximising Reliefs through Early Planning

Early planning is essential because many of the most powerful IHT strategies are time-dependent. Gifts to individuals (PETs) only become fully exempt after seven years. Transfers into trust (CLTs) are reassessed if the settlor dies within seven years. Care fee protection requires that assets are transferred well before any foreseeable need for care arises — there is no fixed time limit for deprivation of assets assessments (unlike the 7-year IHT rule), and the longer the gap between the transfer and the need for care, the harder it is for the local authority to challenge it.

Early planning also allows you to make the most of reliefs such as BPR and APR — particularly important given the changes coming into effect from April 2026. And with inherited pensions becoming liable for IHT from April 2027, reviewing your pension arrangements now could save your family significant sums. We can help you navigate the complexities of these reliefs and ensure that your estate plan is optimised to take full advantage of them.

Recognising the Need to Reassess Your Plans

It’s not just about starting early — it’s also about reviewing and updating your estate plan regularly. Changes in your personal circumstances, or in the law itself, can mean that a plan which was perfectly effective five years ago no longer provides the protection you need. Common triggers for a review include:

• Marriage, divorce, or entering a new relationship — particularly relevant for protecting assets from sideways disinheritance in blended families
• The birth or adoption of children or grandchildren — who may now qualify as direct descendants for the RNRB
• Significant changes in asset values — particularly property, which may have pushed you above the RNRB taper threshold of £2 million
• Changes in legislation — such as the upcoming BPR/APR cap, the pension IHT changes from April 2027, and the continued nil rate band freeze
• Health changes — while you cannot transfer assets to avoid care fees once a foreseeable need has arisen, regular reviews ensure you plan before this becomes an issue

Our team is available to advise on your options for protecting your family finances. We will work with you to create a tailored estate plan that meets your needs and ensures a secure financial future for your loved ones. Plan, don’t panic — but do plan.

Taking Action to Safeguard Your Legacy

Protecting your estate and assets is crucial for the well-being of your loved ones. Understanding the intricacies of inheritance tax, including the nil rate band and residence nil rate band, can help you make informed decisions about how your assets will be distributed and taxed on death.

To ensure your legacy is safeguarded, consider the following steps:

Review your current estate plan and assess whether it aligns with your goals and the current tax landscape. With the nil rate band frozen until at least 2031, BPR/APR changes from April 2026, and pensions becoming liable for IHT from April 2027, there has never been a more important time to ensure your planning is up to date.

Immediate Steps to Consider

Evaluate your assets and consider whether a lifetime trust, targeted gifting, or a combination of strategies could reduce your IHT exposure. If your home is your primary asset, explore options such as the Family Home Protection Trust (Plus) to protect it from care fees while retaining IHT reliefs including the RNRB. If you have life insurance, check whether it’s written into trust — if it isn’t, the full payout could be subject to 40% IHT. Make sure you have a valid, up-to-date will alongside any trust arrangements. And consider whether a Lasting Power of Attorney (LPA) is in place — both for finances and for health and welfare — so that your affairs can be managed if you lose capacity.

Seeking Professional Guidance

Our team is here to provide expert guidance and support. We encourage you to fill out our contact form, call us at 0117 440 1555, or book a call with our specialists to discuss your estate planning needs. We’re the first and only company in the UK that actively publishes all prices on YouTube — because we believe in transparency.

By taking proactive steps, you can ensure your legacy is protected, and your loved ones are provided for. Not losing the family money provides the greatest peace of mind above all else.