The changes to IHT announced in the Autumn Budget 2025 – where unused pension funds be part of estates for IHT purposes from 2027, and reduction to tax reliefs for agricultural property (APR) and business property (BPR) from 2026, many more families are considering how to minimise their IHT liability.
Thinking about inheritance tax isn’t easy. It can come with strong emotions and big questions about how to protect your loved ones and everything you’ve worked hard for. At Whitehead Monckton, our inheritance tax advice solicitors are here to help you plan ahead with clarity, compassion and practical advice – so your legacy is passed on the way you intend.
Inheritance Tax (IHT) may be payable on assets that you own (your estate) when you pass away. This includes:
There is a threshold before tax is payable. This is known as the Nil Rate Band, and is currently £325,000. Anything above this may be taxed at 40%, unless exemptions apply.
If you leave your estate to a spouse or civil partner, it’s usually exempt from IHT. Married couples and civil partners can also combine their Nil Rate Bands – potentially passing on up to £650,000 tax-free.
However, if your partner is not legally recognised (i.e. you are not married or in a civil partnership), no exemption applies under current IHT rules. And if your spouse or civil partner is domiciled outside the UK, the exemption is capped at £325,000.
If you leave your main residence to your children or grandchildren, your estate may benefit from the Residence Nil Rate Band (RNRB) – an additional IHT allowance on top of the standard Nil Rate Band. For the 2025/26 tax year, this can add up to £175,000 per person, meaning a couple could potentially pass on £1 million tax-free. It’s a valuable relief designed to help families keep their homes across generations.
One of the most effective ways to reduce IHT is through gifting. Some gifts are immediately exempt, while others become exempt if you live for seven years after making them. Regular, well-planned gifts can significantly reduce the taxable value of your estate – and bring joy while you’re still here to see it.
Nobody wants to pay more tax than they have to, so it’s wise to plan ahead.
Trusts are a powerful way to manage how your assets are passed on. They allow you to:
Unlike outright gifts, trusts ensure your wishes are respected and your assets are managed responsibly by appointed trustees.
At Whitehead Monckton we offer advice relating to trusts and IHT planning individually tailored to your specific circumstances.
We have extensive experience in dealing with both straightforward and very complex arrangements on behalf of our clients. In some cases we are advising the 3rd generation of families as their assets are distributed to the next generation in the most tax effective and practical way.
Our clients stay with us for generations because they trust our expert advice and know that we care about them, their family and their future.
To set up an initial meeting to discuss the potential options for you, please contact us.
