Inheritance tax planning is an important part of financial planning for many families. As property values, pensions, savings and investments grow over time, more people are finding that their estate may be exposed to inheritance tax.
For many clients, the concern is simple: they want to pass on as much of their wealth as possible to their loved ones, rather than losing more than necessary to tax.
The right planning can help, but it is important to start with a clear understanding of your position and objectives.
What is inheritance tax planning?
Inheritance tax planning involves reviewing your estate and considering what steps may be available to reduce or manage a potential inheritance tax liability.
Your estate may include:
- Your home
- Savings
- Investments
- Personal possessions
- Business assets
- Life policies
- Certain trusts
- Other property or assets
Pensions can also play an important role in estate planning, although the treatment of pensions depends on the rules at the time and your individual circumstances.
Start by understanding your estate
The first step is to calculate the value of your estate. Many people underestimate this, especially where their main residence has increased significantly in value.
Once you understand the approximate value of your estate, you can then consider who you want to benefit, how much access you need to your money during your lifetime, and whether any planning is appropriate.
Key questions include:
- Who do you want to inherit your wealth?
- Do you need ongoing access to your assets?
- Are you comfortable making gifts during your lifetime?
- Do you want to retain control?
- Are there vulnerable beneficiaries?
- Do you have a valid and up-to-date will?
- Do you have powers of attorney in place?
- Do you want to provide for children, grandchildren or other family members?
Inheritance tax planning should never be done in isolation. It should be considered alongside your wider financial plan.
Common inheritance tax planning options
Depending on your circumstances, planning may include:
- Making use of available allowances
- Lifetime gifting
- Regular gifts from surplus income
- Trust planning
- Life assurance written in trust
- Pension planning
- Investment-based inheritance tax planning
- Reviewing ownership of assets
- Working with solicitors on wills and legal structures
The suitability of each option will depend on your objectives, financial position, health, age, family circumstances and need for future access.
The balance between tax planning and personal security
One of the most important parts of inheritance tax planning is making sure you do not give away too much too soon.
Reducing inheritance tax is important, but it should not compromise your own financial security. You may need funds later for care costs, health needs, home improvements, lifestyle spending or unexpected events.
Good planning balances the desire to pass wealth on with the need to maintain control, flexibility and financial independence.
Why advice is important
Inheritance tax planning can be complex, and poor planning can create unintended consequences. Gifts, trusts, pensions, investment products and legal documents all need to work together properly.
It is also important to involve the right professionals. Financial advisers, solicitors and tax advisers often work together to ensure the planning is suitable and properly structured.
How Apex Financial Planning can help
At Apex Financial Planning, we help clients understand their potential inheritance tax position and explore suitable planning options.
We can work alongside your solicitor or tax adviser where needed, helping ensure that your financial planning supports your wider estate planning objectives.
Risk warning
Inheritance tax planning, trusts, will writing & tax planning are not regulated by the Financial Conduct Authority.
Approver Quilter Financial Services Limited 21/08/2026