1. Utilise the Nil-Rate Band – The nil-rate band is the threshold below which no inheritance tax is charged. As of the 2023/2024 tax year, this amount is set at £325,000. If your estate is valued at or below this amount, it will not incur any IHT. If the estate exceeds this threshold, IHT is charged at 40% on the value above £325,000.
- Tip: For married couples and civil partners, any unused nil-rate band can be transferred to the surviving partner upon death. This means that if one partner dies and leaves their estate to the other, the surviving partner can potentially claim a combined nil-rate band of £650,000, significantly reducing the taxable estate.

2. Residence Nil-Rate Band (RNRB): The RNRB is an additional threshold that applies when a main residence is passed on to direct descendants, such as children or grandchildren. As of the 2023/2024 tax year, the RNRB is £175,000. This means that if your estate includes a home that you leave to your direct descendants, you can potentially increase your tax-free allowance to £500,000 for individuals (£1 million for married couples or civil partners).
- Tip: To qualify for the RNRB, ensure that your will clearly states your intention to leave your main residence to your direct descendants. If your estate exceeds £2 million, the RNRB may be reduced, so careful planning is essential.

3. Gifting: Making gifts during your lifetime can significantly reduce the value of your estate for IHT purposes. Gifts made more than seven years before your death are generally exempt from IHT. This strategy allows you to pass on wealth to your beneficiaries while you are still alive, potentially avoiding a hefty tax bill after your death.
- Tip: Consider making regular gifts within the annual exemption limit of £3,000 per year. This can be carried forward to the next tax year if unused. Additionally, you can make gifts to individuals without incurring IHT, provided you survive for seven years after the gift.

4. Potentially Exempt Transfers (PETs): PETs are gifts made to individuals that are exempt from IHT if the donor survives for seven years after making the gift. If the donor dies within this period, the value of the gift is included in the estate and may be subject to IHT.
- Tip: Keep detailed records of any PETs made, including the date and value of the gifts. This will help you track the seven-year period and ensure accurate reporting for IHT purposes.

5. Annual Exemption and Small Gifts Exemption: The annual exemption allows you to give away up to £3,000 each tax year without it counting towards your estate for IHT purposes. Additionally, you can make small gifts of up to £250 to as many people as you like each year without incurring IHT.
- Tip: Use the annual exemption every year to gradually reduce your estate’s value. If you have not used your annual exemption in the previous tax year, you can carry it forward, allowing you to give away £6,000 in one year.

6. Gifts on Marriage: Gifts made in consideration of marriage are exempt from IHT up to certain limits. For example, you can give £5,000 to a child, £2,500 to a grandchild, and £1,000 to anyone else without incurring IHT.
- Tip: Consider gifting to family members on their wedding day to take advantage of this exemption. This can be a meaningful way to support loved ones while also reducing your estate’s value.

7. Charitable Donations: Gifts made to registered charities are exempt from IHT. Additionally, if you leave 10% or more of your net estate to charity, the IHT rate on the remaining estate can be reduced from 40% to 36%. This not only benefits the charity but also reduces the tax burden on your estate.
- Tip: Include charitable bequests in your will and consider discussing your intentions with the charity to ensure they are aware of your plans. This can also help you feel more connected to the cause you support.

8. Trusts: Trusts can be an effective way to manage assets and reduce IHT liability. By placing assets in certain types of trusts, you can remove them from your estate for IHT purposes. Trusts can also provide control over how and when beneficiaries receive their inheritance, which can be particularly useful for minor children or beneficiaries who may not be financially responsible.
- Tip: Consult with a legal or financial advisor to determine the best type of trust for your situation. Common types include discretionary trusts, bare trusts, and interest in possession trusts, each with different implications for IHT.

9. Life Insurance Policies: Taking out a life insurance policy written in trust can provide funds to cover any IHT liability, ensuring that your beneficiaries receive the full value of your estate. If the policy is not written in trust, the payout may be included in your estate and subject to IHT.
- Tip: When setting up a life insurance policy, specify that it should be written in trust. This can help ensure that the payout goes directly to your beneficiaries without being subject to IHT.

10. Business Relief: Certain business assets may qualify for relief from IHT, reducing their value for tax purposes. This includes shares in unlisted companies and certain types of businesses, such as trading businesses. Business relief can be particularly beneficial for entrepreneurs and business owners.
- Tip: If you own a business, consider how it is structured and whether it qualifies for business relief. Keeping detailed records of your business activities and valuations can help support your claim for relief.

11. Review Your Will Regularly: Regularly reviewing your will ensures that it reflects your current wishes and takes advantage of available reliefs and exemptions. Changes in personal circumstances, such as marriage, divorce, or the birth of children, may necessitate updates to your will.
- Tip: Schedule regular reviews of your will, ideally every few years or after significant life events. This will help ensure that your estate plan remains effective and aligned with your goals.

12. Seek Professional Advice: Consulting with a financial advisor or estate planner can provide tailored strategies to minimise IHT and ensure compliance with current laws. Professionals can help you navigate complex tax laws and create a comprehensive estate plan that meets your needs.
- Tip: Look for advisors with expertise in inheritance tax planning and estate management. They can provide valuable insights and help you implement effective strategies