Plan While There’s Time
Fewer than 1 in 20 UK estates pay inheritance tax, yet HMRC collects more from it year after year. Frozen thresholds, new limits on business and farm reliefs, and pensions being brought into the estate are pulling in families who never thought of themselves as wealthy. The good news: IHT is the most plannable tax there is. With enough time, sensible gifting, a well-structured will, and the right use of reliefs can take a six-figure bill down to something far smaller, and sometimes to nothing.
Business and farm relief: the new cap. Business and agricultural property relief used to be unlimited at 100%. It’s now capped, currently at £2.5 million of qualifying assets per person, with 50% relief above that. The allowance transfers between spouses, so a couple can shelter double, but only if wills and ownership are structured to use it. AIM shares now get 50% relief across the board.
Pensions are joining the estate. From April 2027, most unused pension funds count as part of your estate for inheritance tax. Pensions have long been the default asset to leave until last, precisely because they sat outside the estate. For many families that logic now reverses, and the nomination forms and drawdown order set years ago deserve a fresh look before the change lands, not after.
The 7-year rule on gifts. Most gifts to individuals escape inheritance tax entirely if you survive them by 7 years, and the tax tapers down from year 3 onwards. The catch is evidence. Your family needs to show what was given, when, and what exemptions applied, sometimes a decade later. We keep the gift log so the relief actually gets claimed.
Where Good Advice Makes The Difference
Passing on a business. A trading company worth more than the relief cap no longer gets full relief on the excess. Reviewing ownership between spouses, and how the shares pass on each death, can double what stays within the 100% band.
Gifting to children. Starting a gifting plan at 65 rather than 75 is the difference between gifts falling out of the estate entirely and your family paying 40% on them. The 7-year clock only helps if it’s started.
The estate that’s grown past the taper. Once an estate passes the taper threshold, currently £2 million, every £2 above it costs £1 of the residence allowance. Gifting or restructuring to stay below the line can protect the full allowances for a couple.
Pensions. A family expecting to inherit a pension untouched by IHT may soon face 40% on it. Reordering which assets you spend and which you preserve can restore much of what the rule change takes away.
Leaving to charity. Leave at least a tenth of the taxable estate to charity and the rate on everything else drops. Set at the right level, a bigger charitable gift can leave your family with more, not less.
After a death. An inheritance can be redirected within 2 years of death, and treated for tax as if the deceased had left it that way. Where a will missed the reliefs, that window is a real second chance, but it closes.
How It Works
1. Book a call. Tell us about what you own, who you’d like it to go to, and any pensions, business interests or property in the picture.
2. We review your position. You get a clear forecast of the IHT bill as things stand, and honest advice on what we’d change, with the saving on each option in pounds. Fees are fixed and agreed before we start, with no surprises.
3. We put the plan to work. Gifting records, relief claims, coordination with your solicitor and IFA, and a review when the rules or your circumstances change.
The rules reward people who start early. Book a call and let’s look at where you stand.
Robert Marjoram, Founder and Owner
Inheritance Tax Planning Isn’t One-Size-Fits-All. Here’s What We Cover.
We handle the planning and the paperwork, whatever the estate looks like. That includes:
Why Choose Together Accounting
Together Accounting was founded by Robert Marjoram in 2013, and we’ve been advising UK small business owners, landlords, and investors on tax planning ever since. We’re Xero and QuickBooks specialists, rated 5.0 on Google, and we work with clients across the UK, not just locally in Norwich. We work with business owners whose company is their largest asset, landlords and property investors whose portfolios have quietly grown past the thresholds, families with estates near the taper threshold, retirees with significant pension funds, and executors dealing with an estate now. Inheritance tax planning sits alongside the capital gains and income tax work we already do, which matters, because the three interact and advice that looks at one in isolation gets it wrong.
We’re also honest about where planning helps and where it doesn’t. Most estates won’t pay inheritance tax at all, and if yours is one of them we’ll tell you that in the first meeting rather than sell you a plan you don’t need. Where wills or trusts need drafting, we work with your solicitor rather than pretending to be one. And where there is a genuine exposure, we’ll tell you plainly what it is, what can be done, and what each option is worth in pounds.
If you’d like to find out where your estate stands while there’s still time to change it, contact our team today. We’re looking forward to hearing from you.
Inheritance Tax FAQs
Everyone has a nil-rate band, currently £325,000, which has been frozen for many years with no rise in sight. If your home passes to children or grandchildren, the residence nil-rate band can add up to £175,000 more. Both transfer between spouses and civil partners, so a couple leaving a family home to their children can often pass on up to £1 million before any tax is due. Above the available allowances, the standard rate is 40%.
It’s an extra allowance where a home you’ve lived in passes to direct descendants: children, grandchildren, step-children and adopted children all count, but nieces, nephews and siblings don’t. It also erodes once your estate passes the taper threshold, and larger estates lose it entirely. Estates near the threshold, and wills that leave the home into the wrong kind of trust, lose it without realising.
Gifts to individuals are potentially exempt: survive 7 years and they leave your estate completely. Die within 3 years and they’re taxed at the full 40% where they exceed your allowances. Between years 3 and 7, taper relief reduces the tax in steps. One warning: if you give something away but keep using it, like gifting your house and living in it rent-free, HMRC treats it as still yours, however long you survive.
Each tax year you can give away £3,000 (double that if you didn’t use last year’s allowance), unlimited smaller gifts of £250 per person, and larger one-off gifts on a wedding. Beyond that, regular gifts made out of genuine surplus income are exempt with no cash limit at all, provided they don’t dent your standard of living and you keep records. That last one is the most underused exemption in the whole tax.
Business and agricultural property relief used to be unlimited at 100% for qualifying assets. The 100% rate is now capped per person, currently at £2.5 million, with 50% relief above that, an effective 20% tax on the excess. The cap transfers between spouses, so couples can cover double with the right structuring. AIM-listed shares are the exception: they now get 50% relief regardless, with no access to the 100% band.
From April 2027, most unused pension funds and death benefits count as part of your estate. Death-in-service benefits and dependants’ pensions from defined benefit schemes stay outside. If a meaningful share of your wealth sits in pensions, the planning that made sense before, spending other assets first and preserving the pension, may now be backwards. This is worth reviewing before the change lands, not after.
Transfers between UK spouses and civil partners are completely exempt, in lifetime and on death, whatever the value. Where the receiving spouse isn’t a long-term UK resident, the exemption is capped unless they elect into the UK regime, a trap for international families. Whatever allowances the first spouse doesn’t use transfer to the survivor.
Six months after the end of the month of death, with interest running after that. It generally has to be paid before probate is granted, which is why illiquid estates get stuck. Tax on land, buildings and business interests can be spread over 10 annual instalments, and instalments on assets qualifying for business or agricultural relief are now interest-free. Life insurance written in trust is the classic way to make sure the cash is there.
Not always. Within 2 years of death, the beneficiaries can sign a deed of variation redirecting who inherits what, and for inheritance tax it’s read as if the deceased wrote it that way. That can rescue a wasted spouse exemption, restore a lost residence allowance, or skip a generation. It needs everyone affected to agree, and the window is strict, so speak to us early.
Call us today
01603 627963
The best time to plan was ten years ago. The second best time is now.
Half an hour now can save your family a great deal later. Tell us about your situation and we’ll review your options.