Do you know what impact inheritance tax will have on your loved ones?

By TP Financial Solutions

05 Oct 2022

tp-financial-john-headshots-high-res-4.jpg

The subject of inheritance is a hot topic. Daniel Craig has both ‘shaken’ and ‘stirred’ the debate by stating he’ll be spending or giving away most of his fortune, rather than leaving it to his children. It’s an interesting point of view, made a little easier of course if you’re lucky enough to be sitting on an enormous amount of wealth.

While most of us won’t be lucky enough to amass similar sums of money in our lifetime, it doesn’t necessarily mean we’ll avoid the issue of inheritance tax (IHT) if we do feel it’s right to pass our wealth on to our children or grandchildren.

It may seem that IHT impacts relatively few, but in 2020 - 21 HMRC collected more than £5.3 billion from thousands of families. In addition, the current threshold of £325,000 has been frozen until 2025/26 – in a move many commentators have described as a stealth tax – with the government predicted to receive £ 6.7 billion in 2022/23*.

IHT is usually levied on the value of all the assets of your estate when you die, after deducting any liabilities, exemptions, and reliefs. Assets left to a spouse or civil partner of the deceased are usually exempt, as are assets left to a charity. However, it is possible to ethically and responsibly reduce or mitigate the impact of IHT with some astute planning, ensuring that more of the wealth you’ve worked so hard to accumulate is passed to the people who you decide deserve it most.

Five things to think about

There are a number of things you can do to mitigate what you might be currently on course to pay but here are five things to think about: 

1.      Make sure you have a will – this is fundamental. It’s essential that you have an up-to-date will as it’s one of the most important things you can do to ensure your estate goes to who you want 

2.      Gift some of your wealth now – many people leave it too late to pass on their wealth. It can be more tax-efficient in relation to IHT to gift money while you are still alive, plus you have the chance to see how those gifts can transform the lives of your family. Anything you give away more than seven years before your death is exempt from IHT. You can give away up to £3,000 each year IHT-free and small gifts of up to £250 are exempt as long as they are made from your income. You could make larger, regular gifts, tax free, but these must also be from income and you must demonstrate that they do not impact your standard of living 

3.      Use your pensions – Not everyone realises that pensions are one of the most tax-efficient ways to pass on your wealth. If you die before the age of 75, benefits left in a money purchase pension can be paid as a lump sum or drawdown income to any beneficiary, with absolutely no tax to pay. After the age of 75 they will be taxed at the beneficiaries’ marginal income tax rate 

4.      Consider trusts - trusts can help reduce an IHT bill and give you control over how your assets are used by future generations. Some trust structures let you leave money without it being subject to IHT. However, the rules around this vary widely for different structures, so you should seek advice on how this could work for you 

5.      Check your life assurance – you can use life assurance to either meet or reduce a prospective IHT bill. If it’s written in trust, the proceeds of the life assurance policy won’t be included in your estate. When you die the policy pays out to the trust which pays all or part of the inheritance tax bill. 

IHT is complex - talk to an expert

Making a plan and adapting it to meet your changing circumstances can help you make sure you don’t miss out on valuable tax allowances. IHT is a complex subject which is why taking expert advice can help you not pay more tax than you need to and ensure your estate goes to those you really want it to. 

If you’d like to learn more, please get in touch now. 

The value of pensions and investments can fall as well as rise. You may get back less than you invested. 

Tax treatment varies according to individual circumstances and is subject to change.

Inheritance Tax Planning is not regulated by the Financial Conduct Authority. 

*Source – OBR – Inheritance Tax – Latest trends and forecasts March 2022

Latest news

1

New India branch campus on the horizon for Lancaster University Keir Starmer meets Indian PM and included Prof Simon Guy Lancaster University. Pic Simon Dawson

New India branch campus on the horizon for Lancaster University

09 Oct 2025

2

Best events and talented students complete finalists list for Lancashire Tourism Awards 2026 Best Events and Talented students on Lancashire Tourism Awards finalist list

Best events and talented students complete finalists list for Lancashire Tourism Awards 2026

09 Oct 2025

3

East Lancashire Learning Group named UK digital transformation leader in CIO 100 Awards Andrew Dewhurst with the award win

East Lancashire Learning Group named UK digital transformation leader in CIO 100 Awards

09 Oct 2025

4

PHX Training appoints new business leader in Blackpool Jason Davenport PHX Training

PHX Training appoints new business leader in Blackpool

09 Oct 2025

5

Velocity seals Airbus extension worth up to $54m Velocity Composites Has Announced Its Entry Into The Us Market

Velocity seals Airbus extension worth up to $54m

08 Oct 2025

Background image for hub sign up block

LBV Hub

Leverage Lancashire Business View platforms

Post your news
Post your events
Post your offers
Build your network
Improve your SEO
Gain coverage in the magazine
Sign-up
Events
CMI Level 5 Management and Leadership Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Management and Leadership Course

Preston Campus, Preston , PR1 2HE

09:00 - 17:00

CMI Level 5 Project Management Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Project Management Course

Preston Campus, Preston, PR1 2HE

08:00 - 17:00

Help to grow management course
Help to grow - barriers to growth.png.png
LBV Hub Seminars
26 Sep 2025 - 16 Dec 2025

Help to grow management course

Preston Campus , Preston , PR1 2HE

09:00 - 15:00

Empowering Franchise Growth in the North West
Empowering Franchise Growth in the North West event
LBV Hub Seminars
09 Oct 2025 - 09 Oct 2025

Empowering Franchise Growth in the North West

Forbes Solicitors, Sceptre Way, Walton Summit Centre, PR5 6AW, PR6 6AW

08:00 - 10:00

Empowering franchise growth in the North West
TFA Event - Empowering Franchise Growth.jpg.jpg
LBV Hub Seminars
09 Oct 2025 - 09 Oct 2025

Empowering franchise growth in the North West

Forbes Solicitors Sceptre Way Walton Summit Centre , Preston, PR5 6AW

08:00 - 10:00

Advantage: AI – A Workshop for Business Leaders – Oct 10th
Ai 10.10.png.png
LBV Hub Seminars
10 Oct 2025 - 10 Oct 2025

Advantage: AI – A Workshop for Business Leaders – Oct 10th

Door4 Office, Burnley Wharf, Burnley, BB11 1JG

09:00 - 12:00

The New Employee Rights Landscape: Day One Compliance Essentials
EventBrite NORi - 15th Oct 2025 Webinar.png.png
LBV Hub Webinar
15 Oct 2025 - 15 Oct 2025

The New Employee Rights Landscape: Day One Compliance Essentials

Microsoft Teams, Microsoft Teams, PR253XH

13:30 - 15:00

Unlocking major project opportunities in the North West
Lancs-cham-logo.jpg.jpg
LBV Hub Seminars
15 Oct 2025 - 15 Oct 2025

Unlocking major project opportunities in the North West

Strathmore Hotel, Morecambe, LA4 5AP

08:00 - 10:00

October Freelancer Meet-Up
LBV Hub Networking
16 Oct 2025 - 16 Oct 2025

October Freelancer Meet-Up

Society1, Coworking Space, Preston, PR1 3LT

10:00 - 11:30

The Autumn Re set - pour me a wine
LBV Advert_Autumn Reset 1200 x 630px.png.png
LBV Hub Networking
16 Oct 2025 - 16 Oct 2025

The Autumn Re set - pour me a wine

The Artistry House , Preston , PR1 3JJ

17:30 - 19:30

The Business Network Central & East Lancashire
LBV Header (26).png.png
LBV Hub Networking
16 Oct 2025 - 16 Oct 2025

The Business Network Central & East Lancashire

Stanley House, Blackburn, BB2 7NP

11:30 - 14:15

Women scaling up Blackpool Fylde and Wyre
LBV Hub Seminars
22 Oct 2025 - 09 Jan 2026

Women scaling up Blackpool Fylde and Wyre

The Small Business Academy, Blackpool, FY4 5JX

09:30 - 15:30

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more LBV124 Online Graphic
Subscribe now

Weekly news bulletin