Inheritance tax planning is the process of structuring your estate, gifts and assets during your lifetime so that less of what you leave behind is taken in tax, while making sure your wishes are carried out clearly and without unnecessary delay for your family. For most UK families with a home, savings and some investments, a small number of planning steps taken early can make a significant difference to the final tax bill.
Do you actually need to think about inheritance tax?
Inheritance tax (IHT) is charged at 40% on the value of an estate above the available tax-free allowances. Every individual has a nil-rate band of £325,000, and an additional residence nil-rate band of up to £175,000 if a main home is left to children or grandchildren. In practice, this means a couple can often pass on up to £1 million before IHT applies — but property values in areas like Ringwood, Wimborne and Poole mean many local families are closer to that threshold than they realise, particularly once savings, pensions and life insurance are added to the family home.
If your estate, once you add up your property, savings, investments and any life policies not written in trust, comes close to or exceeds these thresholds, it is worth having a proper review rather than assuming it will sort itself out.
The main ways to reduce an inheritance tax bill
Lifetime gifting. Gifts made more than seven years before death generally fall outside your estate for IHT purposes. There are also annual exemptions (£3,000 per year, which can be carried forward one year if unused) and specific exemptions for gifts out of surplus income, which can be a particularly effective and underused tool if structured correctly.
Using trusts. Placing assets into a trust can remove them from your estate while still allowing you some control over how and when beneficiaries receive them. Trusts carry their own tax rules and are not right for every situation, but they are a genuine option worth exploring, especially for second marriages, minor children, or protecting assets for future generations.
Business and agricultural property relief. If you own a trading business, a share in one, or agricultural land, you may be entitled to significant relief from IHT on those assets, sometimes up to 100%. This is an area that is frequently missed or under-claimed, and one where recent legislative changes mean the position needs re-checking even if you had advice a few years ago.
Life insurance written in trust. A life policy written into an appropriate trust does not form part of your estate and can be used specifically to cover an anticipated IHT bill, so your family is not forced to sell a property or business asset quickly to pay it.
Pensions and death benefits. The tax treatment of pensions on death is changing, and this is an area where out-of-date assumptions can lead to real financial harm to beneficiaries. If your estate planning was last reviewed before recent changes, this alone is a reason to revisit it.
Why a review matters even if you think everything is “sorted”
We regularly see estate plans, wills and trusts that were put in place five, ten or even twenty years ago and never revisited. Property values change, family circumstances change (marriage, divorce, new grandchildren, a business sale), and the law itself changes. An IHT review is not just for people who have never done any planning — it is equally important for people who did the right thing years ago and have not checked whether it still works.
What an inheritance tax review with Artema involves
We start by building a clear picture of your estate: property, business interests, savings, investments, pensions and existing trusts or life policies. From there we identify your current exposure to IHT, flag any reliefs you may not be using, and set out practical, prioritised options — from straightforward gifting strategies through to more involved trust or business structuring where it is genuinely warranted. As a firm based in Ringwood and working with families across Wimborne, Poole and Bournemouth, we combine technical tax knowledge with a properly local, personal service.
Frequently asked questions
How much is inheritance tax in the UK?
Inheritance tax is charged at 40% on the portion of an estate above the available nil-rate bands, which for many couples can total up to £1 million once the main residence nil-rate band is included.
Can I avoid inheritance tax by gifting my house to my children?
You can gift your home, but if you continue to live in it without paying a market rent, it is likely to be treated as a “gift with reservation of benefit” and remain part of your estate for IHT purposes. This needs to be structured carefully to actually be effective.
How far in advance should I start inheritance tax planning?
As early as possible. Many of the most effective reliefs, particularly lifetime gifting, rely on surviving seven years from the date of the gift, so starting early gives you far more flexibility than starting when a health concern or a specific deadline forces the issue.
Do I need a solicitor or an accountant for inheritance tax planning?
Both roles matter and work best together. An accountant assesses the tax position, models the numbers and identifies available reliefs; a solicitor drafts the wills, trusts and legal documents needed to implement the plan. We regularly work alongside local solicitors to make sure both sides are properly joined up.
Artema Limited is a Ringwood-based accountancy and advisory practice providing inheritance tax planning and estate reviews for individuals and families across Hampshire and Dorset. To arrange a confidential IHT review, contact Artema on 01425 470044.