How to make inheritance tax less of a burden

This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our privacy notice.

How to make inheritance tax less of a burden

By Tony Granger, February 2020

Tony Granger examines different ways to reduce the incidence of inheritance tax payable on an individual’s estate. 

Inheritance tax (IHT) is payable at 40% on the taxable value of an individual’s estate on death, after all deductions, exemptions, etc. are taken into account. 

If chargeable lifetime gifts are made (usually gifts into a discretionary trust), any amount above the unused portion of the IHT ‘nil rate band’ (currently £325,000) is taxed at 20%. In this way, IHT can be payable upfront whilst still alive.

The government currently raises £5.4 billion from IHT receipts (in 2020/21), expected to rise to £6.3 billion in 2023/24.

Personal strategies to reduce IHT
These measures can reduce an individual’s estate and save IHT;

Subscribe to a Tax Insider newsletter to get instant access to the Tax Article library.

Get instant access to 1798 articles and a 14 day free trial!
Subscribe
Begin your tax saving journey today

Each month our tax experts reveal FREE tax strategies to help minimise your taxes.

To get Tax Insider tips and updates delivered to your inbox every month simply enter your name and email address below:

Thank you for signing up to hear from us!