Darcy Needham-Jones
Relationship Manager - South East
Inheritance Tax Planning
Inheritance Tax (IHT) can have a major impact on the wealth you pass down to the people you care about most. But with the right planning, you can organise your estate optimally, mitigate IHT and leave the legacy you desire.
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Understanding Inheritance Tax and How to Reduce It
Inheritance Tax (IHT) can take a big chunk out of what you leave behind. In the current 2025/26 tax year, IHT generally applies to estates worth at least £325,000, known as the nil-rate band, with everything above it taxed at rates ranging from 20 – 40%.
You may also qualify for the residence nil rate band (RNRB) of £175,000 or other exemptions, depending on the type of assets you hold.
With expert advice and the right planning, however, you can reduce your future tax bill, protect your assets, and give yourself and your beneficiaries complete peace of mind.
At Cooper Parry Wealth, we help you understand your options, navigate the complex rules, and create an estate plan that’s optimised, compliant, and truly aligned to your values and goals.
Why Inheritance Tax Planning Matters
IHT planning isn’t always straightforward. Between exemptions, reliefs, gifts, trusts, and allowances, the rules can get tricky quick. We’re here to make sure you’re informed, protected, and making the decisions that work best for you and your loved ones.
Whether your estate is simple or sprawling, early planning is key to:
- Reducing your future Inheritance Tax bill
- Protect your wealth for those that matter
- Maximising tax-free allowances
- Ensuring your wealth passes smoothly to your chosen beneficiaries
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Ways to Minimise Your Inheritance Tax
1. Use the Residence Nil-Rate Band
If you leave your home to a direct descendant – including children, grandchildren and great-grandchildren – you may benefit from an additional allowance known as the Residence Nil-Rate Band, currently £175,000 (frozen until 2028). Combined with the standard nil-rate band, this could give up to £500,000 of tax-free estate value before IHT is due
2. Spousal Exemptions
Leaving your estate to your spouse or civil partner? You’ll usually benefit from 100% spouse exemption. Even better: any unused allowances may transfer to your partner, significantly increasing what you can pass on tax-free.
3. Gifting Wealth
Gifting assets during your lifetime can be a powerful way to reduce your taxable estate – while also supporting your loved ones when it matters most. There are various ways in which you can do this, and some ways get you immediate IHT relief.
4. Family Investment Companies & Trusts
For more complex estates, placing assets into a Family Investment Company (FIC) or trusts can provide long-term control and tax efficiency.
And because we’re part of the wider Cooper Parry group, you get access to Personal Tax experts who live and breathe this stuff. We work collaboratively to ensure nothing gets missed.
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Retirement takes planning. Our pensions and retirement specialists work with you to build clear, tax-efficient strategies that protect your wealth and support the lifestyle you want long term.
Whether you’re planning ahead or preparing to step back, we’ll help you make confident, informed decisions every step of the way.
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Protect What Matters with Expert Trust Planning
Trusts can be a powerful way to protect family wealth, support future generations and manage tax efficiently. Whether you’re considering providing for children or grandchildren, mitigating inheritance tax, or safeguarding assets, the right structure makes all the difference.
Our dedicated Trust Services team provides clear, practical advice tailored to your circumstances — helping you put the right plans in place with confidence.
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Your Wealth. Their Future. Let’s Protect It
If you’re looking to minimise your Inheritance Tax bill, protect your assets and get peace of mind that as much of your wealth as possible is going to your beneficiaries, and not HMRC, we should talk.
Inheritance Tax Planning forms part of the holistic support we provide, and helps you to manage all areas of your finances, based on the things you really value – both now, and in the future.
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FAQs
IHT is a tax on the estate (property, money and possessions) you leave behind when you die. In most cases, IHT is charged at 40% on the value of your estate above the standard £325,000 nil-rate band, but this percentage depends on the assets.
With the right planning, exemptions and allowances, you can significantly reduce the tax your beneficiaries may need to pay.
Most people can pass on up to £325,000 tax-free using the nil-rate band. You may also qualify for the Residence Nil-Rate Band (RNRB) – currently £175,000 – if you leave your home to direct descendants.
Couples may combine allowances, potentially passing on up to £1 million tax-free with effective planning.
IHT is normally paid out of your estate before assets are transferred to your beneficiaries. Your executor or personal representative handles the payment.
In some cases – such as certain gifts – your beneficiaries may be responsible, but planning can help handle this.
You can reduce IHT through methods such as:
- Making sure you’re using your nil-rate band and residence nil-rate band in the most effective way
- Gifting assets during your lifetime
- Passing assets to your spouse or civil partner
- Putting money into trusts or Family Investment Companies (FICs)
- Making use of reliefs, such as Business Relief
A tailored estate plan ensures you use every route available to minimise unnecessary tax.
IHT planning is specifically about ensuring your beneficiaries pay as little inheritance tax as legally possible. It is a technical, tax‑focused exercise.
Legacy planning is broader. It goes beyond tax and focuses on what you want your wealth to do, who you want to benefit, and what story you want to leave behind.
We use lifetime cashflow modelling which helps map out your financial position over time, and projects your income/assets through your life. It can help inform decisions about how and when to pass assets on, without running out.
IMPORTANT
Investment values and income can fall as well as rise, and you may get back less than you invested. You could, in some circumstances, lose all your capital. Past performance is not a guide to future returns. Overseas assets may be affected by currency movements, and inflation may reduce future purchasing power.
Lifetime cashflow planning, trusts and Family Investment Companies are not regulated by the Financial Conduct Authority (FCA). Content on this website is:
Based on current UK tax legislation and believed to be accurate at the time of publication, but may change. Tax treatment depends on your individual circumstances, including residency and domicile.
For general information only and does not constitute financial advice. You should seek independent professional advice before making financial or investment decisions.
Intended for UK investors only and does not constitute an offer or solicitation to buy or sell any investment product.