May 21, 2026
Inheritance Tax (IHT) is no longer a concern reserved for the very wealthy. Rising property values, frozen allowances, and the inclusion of pensions in estates for IHT purposes mean more estates are being drawn into the IHT net each year. Understandably, more people want to know how to protect their assets without falling foul of HMRC, and pass on their wealth to those who they want to benefit from it.
At Talis IFA, we help clients navigate these rules every day. Whether you’re planning ahead, supporting ageing parents, or reviewing your own estate, we can help you use the available allowances, gifting rules and reliefs to reduce IHT legally and with confidence.
Below, we answer the most common questions people ask when searching for ways to minimise IHT for their family.
What is Inheritance Tax, and when is it paid?
IHT is charged at 40% of the value of your estate above available allowances. Your estate includes:
Where IHT is due, it is usually paid from the estate by the executors, before assets are distributed to your beneficiaries.
What is the Nil Rate Band, and how does it work?
The Nil Rate Band (NRB) is the amount you can pass on free of IHT. It has been frozen at £325,000 since 2009 and is expected to remain frozen until at least 2031.
Key points:
This means a couple can currently pass on up to £650,000 tax-free before other allowances are applied.
What is the Residence Nil Rate Band, and who qualifies for it?
The Residence Nil Rate Band (RNRB) is an additional allowance designed to help families pass on the family home. It is currently £175,000 per person.
You may qualify if:
Combined with the NRB, this means that a couple can potentially pass on up to £1 million tax-free.
For estates above £2 million, the RNRB tapers away by £1 for every £2 over the threshold meaning that estates worth more than £2,350,000 (£2,700,000 for a couple) are limited to just £325,000 or £650,000 for a couple.
This is an area where the advice of an IFA is important to ensure the RNRB is not lost unintentionally.
What are the HMRC gifting rules, and how can they reduce IHT?
Gifting during your lifetime is one of the most effective ways to reduce IHT, but the rules can be confusing.
Here are the key allowances:
Understanding which gifts qualify — and documenting them properly — is essential. Your Talis IFA can help you to structure a gifting plan that reduces future IHT while ensuring that you retain enough of your wealth to meet your own current and future needs.
What about trusts — do they help reduce Inheritance Tax?
Trusts can be a powerful tool for estate planning, as correctly structured, a trust can help you to protect assets, control how your wealth is passed on, and reduce the value of your taxable estate.
However, they come with their own tax rules, reporting requirements, and potential charges, and sit at the intersection of legal, tax and financial planning, so advice from an IFA is essential. Trusts are not a one-size-fits-all solution, but when used correctly, they can significantly reduce IHT exposure and provide long-term family protection.
Can life insurance help with Inheritance Tax?
Life insurance doesn’t reduce the tax due, but it can provide a lump sum to cover the IHT bill, ensuring your family doesn’t need to sell assets quickly.
The key is to write the policy in trust. If you don’t, the payout may form part of your estate and increase the tax liability.
How can I reduce IHT legally without giving everything away?
There are several strategies that allow you to retain control while reducing the taxable value of your estate:
There usually isn’t a magic wand that can simply make IHT go away, but many people underestimate how much can be achieved with a structured, long-term plan.
What mistakes cause families to pay more IHT than necessary?
Common pitfalls include:
These issues are avoidable with the right advice. Your Talis IFA will not only help you to create your plan, but will also guide you to ensure that everything is correctly documented and reviewed regularly.
Regular reviews are crucial, as the value of your estate is likely to change over time (rising house prices, and growing investments, for example), affecting your future IHT liability. What’s appropriate today is likely to need adjustment in the future.
Should I get advice?
Inheritance Tax planning is highly personal, and the most appropriate strategy depends on your assets, family structure, income, and long-term goals. At Talis IFA, we help clients:
A tailored estate plan can save your family hundreds of thousands of pounds — and give you peace of mind that their financial future is secured. For more information, download our Two Certainties guide for the 2026/27 tax year.
How Talis IFA can help
Talis IFAs approach your estate planning from a ‘life first, money second’ perspective, meaning that our recommendations are always focused on what you want your money to achieve, and on finding ways to make it work harder towards those aims.
We also quite frequently have to remind clients that ‘it’s your wealth’. Whatever your aims for your legacy, sometimes part of the answer to minimising a future IHT bill is to spend more of it and enjoy it now!
This article does not constitute tax or legal advice and should not be relied upon as such. Tax treatment depends on the individual circumstances of each client and may be subject to change in the future. For guidance, seek professional advice.
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