5th August 2025
Smart planning today can protect your family’s future tomorrow.
At Myers & Co Solicitors, we believe that understanding how Inheritance Tax (IHT) works and how to plan for it can make a world of difference for your loved ones.
Whether you’re thinking about how to pass on your home, manage your pension, or reduce your estate’s tax liability, now is the time to take action. With potential changes to tax policy under the current government, proactive planning is more important than ever.
Susan Hall, Director and Head of Wills and Probate at Myers & Co, discusses what you need to know to effectively plan for Inheritance Tax in the current economic climate.
Inheritance Tax (IHT) is charged at 40% on the value of an estate above certain thresholds. Everyone has a standard Nil-Rate Band (NRB) of £325,000, meaning no IHT is due on the first £325,000 of your estate.
If you leave your main residence to direct descendants (such as children or grandchildren), you may also benefit from the Residence Nil-Rate Band (RNRB), currently £175,000. This means an individual could potentially pass on up to £500,000 tax-free, or up to £1 million for married couples or civil partners, if both NRB and RNRB are fully available and transferable.
However, the RNRB is not automatic and is only available if:
Even if you’re not married, you may still qualify for the full £500,000 allowance if you’re passing your home to children or grandchildren.
Gifting is a powerful way to reduce the value of your estate — but the rules are nuanced.
Trusts can be used as part of a tax planning strategy, but they must be carefully structured. If you retain control or benefit from the assets, the gift may be considered a “gift with reservation of benefit” and still count towards your estate.
At Myers & Co, we can advise on the appropriate use of discretionary trusts, interest in possession trusts, and other structures depending on your circumstances.
Pensions have traditionally been a tax-efficient way to pass on wealth. Currently, pensions do not form part of your estate for IHT purposes. However, this is set to change from the 2027/28 tax year, when pensions may become subject to IHT. Planning ahead is essential.
When it comes to property, passing your home to children or grandchildren may qualify for the RNRB but this is not an additional exemption beyond what’s already discussed. It’s important not to double-count this allowance.
If you own farmland or a business, you may qualify for Agricultural Property Relief (APR) or Business Property Relief (BPR) — potentially reducing the taxable value of those assets by up to 100%.
However, from April 2025, stricter rules apply:
These reliefs are complex and under increasing scrutiny, so it’s vital to review your estate with a legal expert.
With the shift to a residence-based IHT system from April 2025, long-term UK residents including non-domiciled individuals may face IHT on their worldwide assets . This makes early planning even more critical.
Using HMRC’s inheritance tax calculator, completing the correct forms, and seeking expert legal advice can help you stay ahead of any changes.
You can view the Government’s IHT tools and calculators here.
Inheritance tax planning isn’t just about saving money it’s about peace of mind. At Myers & Co Solicitors, we’re here to help you make informed decisions that protect your legacy and support your family’s future.
Let’s plan together, so you can move forward with confidence.
For further information, please contact Sue Hall, Director and Head of Wills and Probate at Myers & Co, on 01782 491045 or email sue.hall@myerssolicitors.co.uk. Myers & Co has offices in Stoke-on-Trent, Staffordshire.
