Effective estate planning may help reduce the amount of Inheritance Tax payable, although the right approach depends on your estate and family circumstances.
Possible strategies include using available exemptions, making appropriate lifetime gifts, leaving assets to a spouse or civil partner, making charitable gifts and using trusts where suitable. Married couples and civil partners may also be able to transfer unused tax-free allowances between their estates.
Under current rules, Inheritance Tax is normally charged at 40% on the part of an estate above the available threshold. Additional allowances may apply when a qualifying home is left to direct descendants. However, not every estate qualifies for every allowance, and giving assets away without advice can create unexpected tax or financial consequences.
Estate-planning advice can help identify legitimate opportunities while ensuring you retain sufficient assets for your own needs.