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    Tag: estate planning

    Inheritance Tax receipts continue to rise: why estate planning should be a priority

    Posted on by Rebecca Campbell

    New figures from HMRC show that Inheritance Tax (IHT) continues to generate record revenue for the Treasury, highlighting the growing importance of estate planning for individuals and families.

    IHT receipts reached £6.6bn in the first nine months of the 2025/26 tax year – an increase of £232m compared with the same period in 2024/25.

    Why IHT receipts are rising

    Several factors are bringing more estates within the scope of IHT:

    • Frozen nil-rate bands until at least April 2028 mean that as asset values increase, more estates become liable.
    • Rising property values continue to push estate values above IHT thresholds.
    • Changes to agricultural and business property reliefs (APR/BPR) from 6 April 2026 will introduce a £2.5 million cap on the combined value of assets eligible for 100% relief, with 50% relief applying to amounts above this threshold. Read more on these changes here.
    • Inclusion of unused pensions in estates from April 2027 will significantly alter the tax position for many families.

    As asset values rise and pensions become part of estates – timely, informed advice has never been more valuable.

    The importance of early and effective estate planning

    IHT is often perceived as unavoidable, but with appropriate planning it can frequently be mitigated. Many of the most effective strategies take time to implement and may become less accessible as legislation changes.

    Practical estate planning may include:

    • Making full use of lifetime gifting allowances and exemptions
    • Reviewing business and agricultural assets and succession plans
    • Considering the use of trusts, particularly ahead of forthcoming changes
    • Ensuring wills and other estate planning documents remain current
    • Understanding how pensions will be treated on death
    • Using spousal and civil partner exemptions effectively

    For business owners, deadlines for tax-efficient asset transfers are approaching, making it essential to review succession and estate plans sooner rather than later.

    How PM+M can help

    Our team works with individuals, families, and business owners to navigate the increasingly complex IHT landscape. We provide tailored advice to help clients:

    • Understand current and future IHT exposure
    • Identify practical planning opportunities
    • Implement strategies aligned with personal and family objectives
    • Coordinate with legal and financial advisers where required

    As IHT continues to affect a growing number of estates, proactive planning can make a meaningful difference to the value passed on to the next generation. Get in touch with our team by emailing enquiries@pmm.co.uk to discuss how we can support you with your estate planning needs.

    Navigating major life events with financial planning

    Posted on by Rebecca Campbell

    During your lifetime, you are likely to face a number of significant milestones, such as marriage, buying a home, or retirement. These milestones can be something to look forward to, but also financially challenging.

    Having a strategy in place for your finances can ensure you’re prepared for any immediate expenses along with the long-term impact on your financial stability.

    Possible Key Life Events

    • Career Changes: Depending on your circumstances, a new job or career change could dramatically impact your income or pensions.
    • Marriage or beginning a family: A wedding itself could be a large expense which requires financial planning for months, or even years, in advance. Subsequently, marriage could then bring a shared income and different living arrangements, whilst starting a family could result in childcare and education costs.
    • Buying a Home: Budgeting for mortgage payments, insurance and ongoing maintenance is extremely important when making this significant financial commitment.
    • Retirement: Approaching retirement requires a solid strategy to ensure your pension and savings support your desired lifestyle.

    With the right guidance, these changes can be managed effectively, ensuring your finances are structured to meet your goals.

    Set your Financial Goals

    When facing life changes, it’s important to distinguish between short-term and long-term financial goals. Short-term goals cover immediate needs, like saving for a house deposit or budgeting for childcare. Long-term goals include saving for retirement, paying off your mortgage, or funding a child’s education.

    Create a Realistic Budget

    Once you’ve decided what your financial goals are, you will then have to consider a realistic budget to allow you to achieve these goals. A cash flow forecast is an excellent tool for this, allowing you to test your objectives and create a financial plan to ensure you have enough money to fund your needs. By modelling a cash flow forecast, you can ensure you are on track to have sufficient funds in place. This provides direction and helps you understand what is required to reach your retirement goals, testing different scenarios to get you there.

    Plan for the Unexpected

    Sometimes no matter how well you plan ahead, life can still be unpredictable. An emergency fund and the certain insurance policies can provide a safety net for your finances and peace of mind.

    Where possible, we suggest that you should have enough savings to cover around three to six months of living expenses, should any unexpected emergencies arise, for example house or car repairs. Without this emergency fund in place, it could make it extremely difficult to handle unexpected financial emergencies and the added worry this would bring.

    Considering taking out relevant insurance policies can also provide some extra protection. Depending on your circumstances, this could include life insurance, health insurance, or home insurance.

    Tax Considerations

    Major life events often come with tax considerations which can impact your finances. This could include buying a house, deciding to start your own business, or planning for your retirement. Understanding the tax implications these events will bring and leveraging any available reliefs can be hugely beneficial.

    Property Considerations

    When purchasing property, stamp duty land tax should be a key consideration. The amount will depend on the value of the property and whether it’s your first or an additional home. Selling property could trigger capital gains tax (CGT), particularly if the property is not your primary residence. Additionally, if you are a first-time buyer using a Lifetime ISA (LISA), you can benefit from a 25% government bonus on savings up to £4,000 per year, which can be used towards purchasing a home valued up to £450,000.

    Family Tax Matters

    Marriage can offer tax benefits, such as the marriage allowance, which allows a lower-earning spouse to transfer part of their personal allowance to their partner. Starting a family also introduces new considerations, including child benefit and tax-free childcare schemes, all of which should be considered as part of your overall plan.

    Retirement

    Retirement brings various tax considerations, especially around pension withdrawals. In the UK, 25% of your pension pot can normally be withdrawn tax-free, but the remainder will then be subject to income tax. Additional retirement income from things like rental properties or investments, also require careful tax planning.

    Estate Planning

    Major life events can increase the importance of thorough estate planning. Inheritance tax (IHT) planning ensures your loved ones benefit from your estate without facing large tax bills. Effectively using gifts, trusts, life cover, certain types of investment and IHT allowances can greatly reduce the burden on your estate.

    Reviewing Pension Options

    Pension contributions are one of the most tax-efficient ways to save for retirement. In the UK, retirement plans include workplace pensions, personal pensions, and the state pension, each with its own rules and tax implications.

    Pensions can also play a valuable role in estate planning, as many pension funds aren’t subject to IHT. It’s important to review your pension beneficiaries and align them with your estate plan to ensure your assets are distributed according to your wishes.

    Creating a Retirement Income Plan

    Retirement planning isn’t just about saving; it’s about how you draw on those savings. A retirement income plan balances different sources of income – pensions, investments, and property – in a tax-efficient manner. You should look at putting a strategy in place to reduce any income tax you would be liable to pay on your pension withdrawals and could consider moving your investments to lower-risk options if preserving capital was an important part of your plan. You should also look at how any of your other assets, such as property, could contribute towards your retirement income.

    Summary

    Big life changes can bring big financial challenges and opportunities. It is vital to be proactive and set clear goals. You should create a realistic budget, plan for the unexpected, and seek expert advice on how to optimise your individual financial circumstances.

    For further information or advice on how you can plan ahead to secure your financial future, contact a member of our financial planning team by emailing financialplanning@pmm.co.uk or call 01254 679131.

    The information contained within this article is purely for information purposes and does not constitute financial advice.

    Are you prepared for the Great Wealth Transfer?

    Posted on by Katie Heaton

    Research suggests that over the next twenty to thirty years, a record £5.5 trillion will be transferred between family generations, through either inheritance or gifts – this has been branded as ‘The Great Wealth Transfer’ by financial experts. In our most recent blog, we discuss intergenerational wealth transfer and ways to make this transfer as smooth as possible for the next generation of your family.

    Intergenerational wealth planning

    Although it may sound complicated, this is simply the process of planning the most efficient approach to transferring wealth within your family. It involves taking steps to decide how you and your family can use their wealth to support each other and ensuring those you want to benefit from your wealth are able to do so.

    Perhaps you are looking to pass wealth onto your children or grandchildren as part of an inheritance tax strategy, hoping to fund long-term care for an elderly relative or wanting to support your children through university – whatever the reasons, it’s important to plan ahead to ensure you’re making the most of your wealth.

    Research shows that there is a lack of investment knowledge in the younger generation who are set to benefit from this great wealth transfer and because of this, there is a risk that huge amounts of potential wealth could be unnecessarily lost. This highlights why intergenerational wealth planning is so important.

    Inheritance

    Inheritance will likely form the main focus of your intergenerational wealth plan, as the inheritance you leave behind can make a huge difference to the lives of your family. It’s also vital to clearly understand how inheritance tax (IHT) will impact your estate so you can plan in the most efficient way.

    However, there are thousands of people who pass away without careful planning, resulting in a substantial inheritance tax bill and the value of their inheritance being drastically reduced. HMRC raised £29 billion in IHT receipts between April – August 2022 which was a £300 million increase on the same period in 2021.

    If planned carefully and far enough in advance, it is possible to drastically minimise or even eliminate the impact IHT will have on your estate, so you are able to pass on more of your wealth to those you most want to benefit from it.

    Utilising your wealth now

    Although planning for your family after you have passed is an important part of intergenerational wealth planning, you may also want to look at how you can help them right now, whilst you are still alive. This could include planning to use some of your wealth to assist your children whilst they are at university, helping them to buy their first property or putting some of your wealth into a trust for them.

    Another reason you may wish to utilise some of your wealth could be to assist older family members with any support they may need as they age and their health begins to deteriorate, in particular, your parents. Matters to consider in relation to this could include reviewing your parent’s financial arrangements to establish who will inherit their estate, investing to help fund long-term care or making plans should their mental capacity be lost.

    Summary

    Family relationships can be complicated and simply passing money down to your children before they are ready or have the required knowledge to know how to sensibly look after it is potentially a dangerous move. Intergenerational wealth planning can be complicated, simply because there are so many different factors and people to consider as part of it, plus the added pressures of how much you stand to lose if you get it wrong – for this reason, it’s essential to seek expert advice as soon as possible. If done correctly, it will allow you to ensure all your loved ones, both young and old, are in a better position financially in the longer term.

    Get in touch

    For tailored advice to your individual family circumstances, please get in touch with a member of our financial planning team by emailing financialplanning@pmm.co.uk or calling 01254 679131.

    The value of investments can fall as well as rise. You may not get back what you invest.

    The information contained within this article is for guidance only and does not constitute advice which should be sought before taking any action or inaction.