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Inheritance Tax & Planning

Inheritance Tax can erode the estate you leave behind. At Harrison Brook, we help you plan effectively using financial tools and trusted tax referrals to minimise liability.

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Inheritance Tax (IHT) in the UK can significantly reduce the value of the estate you leave behind. Whether you’re a UK national, an expat returning home, or someone with cross-border assets, understanding how IHT works is essential for effective estate planning. At Harrison Brook, we help clients prepare for the future by integrating IHT planning into their financial strategy. While we are not tax advisers, we partner with trusted specialists and are happy to connect you with them for complex tax matters.

Our goal is to help protect the wealth you’ve built so it passes efficiently to the next generation or chosen beneficiaries — with minimal tax exposure and maximum clarity.

How Inheritance Tax Works in the UK

UK Inheritance Tax is charged at 40% on the value of an estate above the available tax-free allowances:

  • Nil-rate band: £325,000 per person
  • Residence nil-rate band: Up to £175,000 if passing the family home to direct descendants
  • Spousal exemption: Unlimited transfers between UK-domiciled spouses
  • Charitable donations: 10%+ to charity reduces IHT to 36%

Unused allowances can be transferred between spouses, potentially sheltering up to £1 million from IHT. We help structure your estate to fully utilise these exemptions and thresholds.

Financial Planning Tools for IHT Reduction

1. Pensions

Defined contribution pensions are usually outside of your estate for IHT purposes. We help ensure pensions are properly nominated and structured for IHT efficiency.

2. Life Insurance in Trust

Using life insurance policies written in trust can provide your beneficiaries with a tax-free lump sum to cover any IHT due — without increasing the value of your estate.

3. Gifts and Exemptions

You can reduce IHT exposure by making use of:

  • Annual gifting allowance (£3,000 per donor)
  • Small gifts (£250 per recipient)
  • Wedding gifts
  • Gifts out of income
  • Potentially exempt transfers (7-year rule)

We guide clients through these options and track gifting efficiently as part of a broader estate strategy.

4. Trusts

While more complex, trusts can remove assets from your estate if set up correctly. We work with tax specialists to assess whether this is appropriate for your situation.

Expats, Domicile and IHT

Domicile plays a key role in UK IHT liability. Even if you live abroad, you may still be considered UK-domiciled and subject to IHT on your worldwide estate. Key planning considerations:

  • Review of your domicile status and history
  • Structuring foreign property and investments
  • Coordinating with foreign tax rules and treaties
  • Assessing estate exposure upon returning to the UK

Our international focus ensures your estate planning is aligned with cross-border realities.

How We Help

  • Identify and apply all IHT exemptions and allowances
  • Use pensions and life insurance to reduce IHT bills
  • Help structure gifting and charitable strategies
  • Connect you with tax and estate specialists

FAQs

1. How much is Inheritance Tax in the UK?
40% on the estate above the nil-rate bands, though planning can reduce or eliminate this.

2. Do pensions count towards Inheritance Tax?
Generally, no — pensions are usually outside the estate if correctly structured and nominated.

3. Can gifts help reduce IHT?
Yes. Gifting strategies like the 7-year rule, annual allowance, and gifts from income can reduce your estate’s value.

4. Do I pay IHT if I live abroad?
It depends on your domicile. UK-domiciled individuals may still be liable for IHT on worldwide assets.

5. Can you help with trust or will planning?
We don’t draft legal documents but coordinate with solicitors and estate planners while integrating financial solutions.

What Our Customers Say

Don't just take our word for it, here's what some of our clients have to say.

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Testimonials

  • "I found my personal private client adviser Ryan Frost to be very efficient, knowledgeable and helpful. I will not hesitate to recommend his services to others."

  • "Prompt reliable and expert help when needed.Transparent disclosure of all the costs involved. Friendly and efficient service I would highly recommend."

  • "Sound advice in difficult times. Acceptable prices when compared with alternatives. Regular contact and updates in clear understandable form."

  • "I would definitely recommend Harrison Brook to other people. My experience in working with our financial advisor was extremely positive. Speed of response and the level of attention to our needs and requests was great. Administration support was flawless."

  • "Excellent customer service all the way through, professional, proactive, patient in answering all my questions, immediate answer to emails, great follow up and communication, deep legal knowledge and legal experience in the field, all of which helped in having my pension transferred in a faster amount of time than normal. I’ve rarely received such swift and excellent customer service before. The whole complex pension transfer experience could have been heavy and stressful, but instead it was the whole opposite."

  • "It's a nerve-wracking thing to entrust your life savings to a person and company you have never met before. Ryan made the process easy. It was calm, I felt in control and was able to asks and get answers to all the questions I had. I am now all set up with my International SIPP and couldn't be happier."

Harrison Brook has a 5 star independent service rating on Feefo

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