Inheritance Tax: Key Strategies And Insights Explained

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Inheritance Tax: Key Strategies And Insights Explained

By Malcolm Finney BSc (Hons), MSc (Bus Admin), MSc (Org Psych)

Inheritance tax has a reputation for being unavoidable, but in practice it is one of the most planning responsive taxes there is. The problem is that the rules have just changed in a fundamental way. Under the Finance Act 2025, domicile, the concept that had underpinned IHT for decades, was abolished from 6 April 2025 and replaced with a residence based test. An individual's exposure to IHT on their worldwide assets now depends on how many of the last 20 tax years they have spent in the UK, not on where they were born or intend to settle.

This changes who is caught by IHT and how existing planning needs to be reassessed. Add to that the well known traps around the residence nil rate band, the risk of a gift with reservation of benefit unravelling years after it was made, and the strict time limits on post death planning such as deeds of variation, and it becomes clear why getting IHT planning right protects family wealth, while getting it wrong creates exactly the liabilities it was meant to avoid.

In this practical and authoritative guide, Malcolm Finney, an international tax specialist with over 35 years' experience advising UK and overseas clients, and former head of tax at law firm Nabarro Nathanson, sets out everything advisers and individuals need to know to understand and plan around the new inheritance tax landscape.

This report will show you how to:

• Understand the shift from domicile to residence and determine who qualifies as a 'long term UK resident'
• Work through the nil rate band, its transferability and how cumulation affects lifetime and death transfers
• Structure a will so it is clear which beneficiaries bear the IHT on specific gifts and which bear it out of the residue
• Avoid 'bunching' of estates between spouses that can wipe out an otherwise available residence nil rate band
• Make full use of the downsizing addition where a home has been sold, downsized or given away before death
• Use exemptions and reliefs in the right order to maximise their combined effect
• Identify when a gift with reservation of benefit is at risk of unravelling, and structure co ownership of the family home to avoid it
• Use lifetime trusts effectively for minors, including bare trusts and their IHT treatment
• Structure life insurance, loan trusts and single premium bonds to keep proceeds outside the estate
• Use disclaimers, deeds of variation and discretionary will trusts to reshape an estate after death
• Apply deathbed planning techniques to make the most of unused exemptions and reliefs
• Plus much more…

Who will benefit from this report?

This guide is essential reading for anyone wanting to better understand the inheritance tax changes introduced since the October 2024 Budget, and how to plan around them.

It is equally valuable for accountants and tax practices advising clients on estate and succession planning under the new residence based regime.

About the Author

Malcolm Finney BSc (Hons), MSc (Bus Admin), MSc (Org Psych) previously worked for international tax consultancy JF Chown & Co Ltd, was head of international tax at Grant Thornton, and was head of tax at law firm Nabarro Nathanson. He also ran his own international tax practice for five years.

He has been advising clients based in the UK and overseas on taxation matters for over 35 years and has been a prolific speaker at tax conferences around the world. He has written numerous articles for a variety of tax journals and authored a number of books on both domestic and international tax matters.