When we ask clients "would you like to pass on as much of your wealth as possible to your loved ones when you're gone?", the answer is invariably yes. However, Inheritance Tax is affecting more and more families with each passing year, thanks to frozen tax thresholds and rising asset and property prices. In the 22/23 tax year alone, over 31,500 estates faced an inheritance tax bill, which is more than double the number from 2010¹.

This trend is set to continue; with proposed government changes set to bring unused pensions into the taxable estate from April 2027, the number of families affected is only going to rise. Fortunately, with careful planning and a proactive approach, IHT liability can be significantly mitigated, ensuring you can pass on as much as possible to your loved ones.

1. Calculating & Forecasting Your Liability

We don't just look at where you are today, we also look at where you’re headed. We start by auditing your current assets, existing Wills, and your recent gifting history to determine your immediate exposure to Inheritance Tax. Using advanced cash flow modelling, we then forecast this liability into the future. By accounting for asset growth over time, we can show you a year-by-year visualisation of how your potential tax bill might evolve if left unmanaged.

2. Strategic Gifting

Gifting is one of the simplest ways to reduce your estate, but it must be done with precision to avoid the "seven-year" trap. We help you navigate the various available exemptions, from the £3,000 annual allowance and small gifts to more specialist areas like "Normal Expenditure out of Income." This latter, often-overlooked rule allows you to pass on surplus income immediately and tax-free, provided it doesn't affect your standard of living.

3. Trust Planning

Trusts are an essential tool when an outright gift isn't quite right for you and your circumstances. Whether you want to provide for a child who isn't yet ready to manage a large sum, or you want to protect family wealth from the potential effects of a future divorce or bankruptcy, trusts offer control and longevity. We can help you to structure your wealth so that it is protected for the long term and passed on according to your exact wishes.

Please note that this may necessitate the referral to a service that is separate and distinct to those offered by St. James's Place. Trusts are not regulated by the Financial Conduct Authority.

4. Essential Estate Planning: Wills

A properly drafted Will is the cornerstone of any tax strategy. Without one, the state decides who gets what, often leading to unnecessary tax bills and family disputes. We work with you to ensure your Will is not only up to date but structured to utilise every available allowance, such as the Nil-Rate Band and the Main Residence Nil-Rate Band, ensuring your estate is distributed as efficiently as possible.

The writing of a Will writing necessitates the referral to a service that is separate and distinct to those offered by St. James's Place. Wills are not regulated by the Financial Conduct Authority.

5. Specialist Insurance as a Tax Buffer

Sometimes, the best way to deal with an IHT bill is to fund it rather than fight it. This is particularly useful for families who want to pass on a specific property, like a family home, that might otherwise need to be sold to pay the tax. We can arrange life insurance policies that provide a guaranteed payout to cover the tax bill, leaving your assets intact for your heirs.

6. Philanthropy & Charitable Giving

Supporting a cause you care about can also be a highly effective tax strategy. Any gifts made to a UK-registered charity, whether during your lifetime or via your Will, are exempt from IHT. Furthermore, if you leave at least 10% of your net estate to charity, the government may reduce your overall IHT rate from 40% to 36%. We help you integrate your charitable goals into your wider financial plan to create a legacy that gives back.

The levels and bases of taxation and reliefs from taxation, can change at any time and are dependent on individual circumstances.

¹Gov UK - Inheritance Tax liabilities statistics: commentary - 31 July 2025