You’ve built a legacy for your family and you want to leave as much as possible for them to enjoy. Our inheritance tax (IHT) specialists can help you understand your potential IHT liability and plan ahead to protect your family's financial future.
How inheritance tax could affect your estate
Currently, there is a nil rate band (NRB) and a residence nil rate band (RNRB), which are locked in until April 2030. Assets, gifts or savings worth less than £325k won’t be liable for IHT. If you’re passing down a property that is, or was once, your home to your direct descendants, it may only be liable for IHT if it’s worth more than £500k.
Over these thresholds, your estate will usually pay 40% inheritance tax on the net value of any assets passed on. Anything you give away in the seven years before your death may also be liable for inheritance tax.
There are exemptions and reliefs that reduce the amount of IHT payable, such as spouse exemption, business property relief and agricultural property relief. Charitable donations can also reduce the tax burden. We can work with you to consider how the different exemptions and reliefs apply to your particular circumstances.
Pensions and inheritance tax
From 6 April 2027, unused defined contribution pension funds and most lump sum death benefits will also fall within the scope of IHT. Pensions often form a significant part of an individual's wealth. Understanding how these changes could affect your estate should form part of your wider inheritance tax planning.
Inheritance tax on overseas assets
Do you own overseas assets or live abroad? We’ll advise if specialist support is needed in another country. Where you have more than one, we will work with your legal advisers to ensure they don’t conflict and that any double tax treaty relief is maximised.
Inheritance tax advice and planning
IHT is a complex area and mistakes are common. Our UK-based IHT specialists will talk through the options available so you can plan effectively, build flexibility into your arrangements and ensure your estate is structured as tax efficiently as possible.
To find out more about inheritance tax planning, get in touch with your usual RSM contact, or one of our specialists below.