close
Get Started Today

Please fill out the form below and a member of our
team will be in touch with you soon.

    Tag: inheritance tax

    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.

    APR and BPR thresholds rise to £2.5m – what it means for family businesses

    Posted on by Rebecca Campbell

    The threshold for 100% relief under Business Property Relief (BPR) and Agricultural Property Relief (APR), which the government had previously announced would be £1 million per estate, is to now be set at £2.5 million per estate, effective from 6 April 2026. This change was quietly announced by HMRC through a press release on their website on 23 December 2025. This represents another awkward U-turn for the government in terms of its strategy around tax policy, but one which will be welcomed by business owners and farmers alike.

    For family-owned businesses and estates, this change offers greater protection from Inheritance Tax (IHT) than was originally anticipated, following the October 2024 Budget. However, the announcements may frustrate those families who have already set plans in place to deal with their succession planning, in the expectation of a £1m allowance being introduced.

    What the change means in practice

    From 6 April 2026, the first £2.5 million of BPR and APR qualifying assets should receive full IHT relief, with any value above that eligible for 50% relief. Spouses and civil partners can combine their allowances, meaning a couple could pass up to £5 million of qualifying assets free of IHT, on top of the usual nil-rate bands.

    There are also set to be provisions where the death of one party to a marriage occurred before 6 April 2026. In those circumstances, it is envisaged that the survivor’s estate will be able to benefit from a “transferable” allowance of £2.5m – effectively meaning that widowers are no worse off in terms of the allowance they would be entitled to compared to a married couple where both parties are still alive.

    The £2.5m allowance also applies to assets held in trusts for the purposes of calculating the 10 year anniversary charges. For business/agricultural assets held in trusts, the value of which is over £2.5 million, 50% relief will apply and IHT will be due on the excess at rates of up to 6%.

    Who benefits most

    This increase is particularly relevant for family-owned businesses where:

    • Business assets make up a significant proportion of the estate
    • Multiple generations are involved in ownership or management
    • The estate has grown over time and is likely to exceed the previous £1 million cap

    Why planning is still crucial

    Even with the higher allowance, estates above £2.5 million may still face some exposure. Now is an ideal time to:

    • Review business and family asset structures
    • Consider whether lifetime gifting or intergenerational transfers are still appropriate given the increase in headroom – is it better to hold on to assets and benefit from a tax free CGT uplift on death, for example?
    • Factor future business growth and succession plans into estate planning

    Planning ahead ensures family businesses can pass on wealth efficiently while maintaining control and continuity.

    Key takeaway

    The higher APR and BPR thresholds present a welcome change to what the government were originally proposing.

    Whilst many estates may will now be fully covered by IHT reliefs (in the context of business/agricultural assets), careful planning remains important for higher-value businesses, businesses which are likely to increase in value, or complex family arrangements to make the most of the relief and protect family wealth.

    For guidance on how these changes affect your family business or estate, contact Roger Phillips to review your succession and estate planning ahead of April 2026.

    Growth, credibility and survival: what’s really at stake in November’s Budget

    Posted on by Rebecca Campbell

    The run-up to any Budget inevitably brings with it a flurry of speculation and selective leaks. Often these are nothing more than flag-flying exercises so policy ideas can be floated to test the reaction of the press and public before any real decision has been taken. It seems this year is no different. What matters, however, is separating the noise from the reality: what the Chancellor can do, what she might do, and what she should do.

    Income tax remains the government’s single largest source of revenue, accounting for around 27% of receipts and 11% of national income. It is the most obvious lever for any Chancellor looking to raise funds. But the Labour Party’s manifesto pledged not to increase taxes on working people and that commitment already looks fragile. The rise in employers’ National Insurance contributions earlier this year was framed as something different, but it represented a broken promise by stealth.

    There have also been rumours of National Insurance being extended to rental income – a puzzling idea given that NIC has historically been a tax on earnings rather than investment returns. A more coherent approach might be to recognise that the tax system already differentiates between earned and unearned income. Not long ago, the basic rate was 22% on earnings and 20% on investment income. The Chancellor could revisit this structure and perhaps nudge earnings up to 21% while raising the rate on interest and rental income to 24%. Such a move would raise revenue while leaning on those with greater investment wealth, rather than purely on earned income.

    Another near certainty is the continued use of fiscal drag. By freezing thresholds in the face of inflation, the Treasury allows more taxpayers to be pulled into higher bands without the political fallout of an explicit rise in rates. But there is a real problem with the personal allowance. Left unchanged for so long, it risks dragging pensioners with only the state pension into the tax net. That would be politically toxic. I believe the Chancellor should use this Budget to raise the allowance, even modestly, to protect those on the lowest incomes.

    Inheritance Tax is always politically sensitive, but changes in the last Budget have already prompted greater use of gifting. Possible next steps include extending the seven-year survival period or introducing a US-style cap on lifetime gifts exempt from IHT. Either would be radical and controversial, so the government has to weigh the revenue benefit against the risk of alienating middle-income households who increasingly view IHT not as a tax on the wealthy, but as one on families who have worked and saved throughout their lives.

    Pensions remain a constant target for reform, and I can see three possibilities: 1) restricting or reshaping the tax-free lump sum. This would be politically explosive, given that many have planned their retirements and even final mortgage payments around this entitlement. 2) Introducing a flat rate of relief on contributions. This would simplify the system and redistribute relief away from higher earners, although at the cost of dampening incentives to save. 3) levying employers’ NIC on pension contributions. That would raise revenue, but at the expense of both businesses and employees, who ultimately share the burden. None of these options are straightforward, and each risk undermining long-term confidence in retirement saving.

    When Labour came into power, they spoke endlessly of a £22bn black hole. That narrative dominated to such an extent that it risked talking the UK economy into recession. This time around, the government has been quieter. That feels like a deliberate choice by a relatively unpopular administration which is trying to dampen expectations, avoid fuelling pessimism, and buy time. But the Chancellor cannot rely solely on delay. Her policies will only succeed if the economy grows. Growth, in turn, requires confidence and not constant tinkering. It also requires investment from both the private sector and individuals.

    When you combine all of these factors, this Budget must offer something beyond tax rises and fiscal drag. Reliefs for businesses investing in the UK, or incentives for individuals to back British companies, would send an important signal. They would, of course, cost money in the short term but would support the growth the government ultimately needs.

    I know I’m not alone in thinking this, but the decision to delay the Budget until late November may not be accidental as it gives the Chancellor more time to hope for better growth figures. If that happens then it could potentially soften the blow of whatever tough measures she feels compelled to announce.

    For now, the Chancellor faces a delicate balancing act between fiscal responsibility and political credibility, and between raising revenue and sustaining growth. Whether she succeeds will depend not only on the measures announced next month, but also on whether she can offer a clearer, and more confident vision for the economy than we have seen so far.

    It does all make you wonder whether this will be her last Budget. As we know, political cycles move quickly, and so too do ministerial careers.

    The key to successfully running a family business

    Posted on by Rebecca Campbell

    Running a family business can have many advantages if managed correctly and in harmony, but it can also bring many challenges which could lead to potential conflicts, affecting business performance and growth.

    One key point to consider when running a family business, is creating a clear separation between any family and business matters to avoid any issues that could affect the day to day running of the business and hinder long term business growth.

    In our recent blog, our accounting + advisory team layout some key ways to successfully create harmony when running a family business:

    Set a clear long-term vision

    Setting a clear long-term vision from the outset is essential for the success of any family business. This will help ensure your business goals are aligned, you follow a consistent strategy and therefore decisions can be made quickly and efficiently, avoiding any unnecessary conflict. By establishing a common vision, it means each family member can focus their efforts on what truly matters – ensuring the business runs smoothly and remains resilient through challenges.

    Make use of outsider expertise

    It is important to reach out for help in areas where the family don’t have expertise. Typically, this includes law and finance but often can include marketing, advertising and sales. Engaging with experts allows for different opinions and a fresh perspective that can help shape your vision and goals. It also allows for unbiased decision making that can form neutral opinions outside of your family views.

    Outline clear roles and responsibilities

    Setting clear roles and responsibilities from the outset ensures everyone understands their accountability. This helps team members focus on their own work, reduces overlap, and minimises the risk of any conflict or disputes between family members.

    Ensure that business and family matters are kept completely separate

    Although this can be difficult, especially when you spend time together both at work and outside of it, keeping any family matters separate from business matters will minimise disruption to business activities. It is important to differentiate between both family life and work in order to keep those healthy relationships.

    Succession planning

    Succession planning is a key challenge for businesses of all sizes. This process should be collaborative and transparent to build trust and continuity. It’s important for all family members within an organisation to understand each individual’s timeline for working in the business and therefore to plan who will take over their roles and responsibilities when the time comes.

    What areas of tax should you consider when handing over a family business?

    When it comes to retirement for a family business, thought should be given to ensuring any benefit from appropriate tax reliefs is obtained which could help save you a lot of money. There are various ways you can look to do this and it’s vital to understand all the options in detail before making any decisions, however some of the common considerations include:

    Capital Gains Tax (CGT)– This should be considered when passing down a business to a family member. Subject to certain conditions, CGT will not be due on a qualifying transfer made as a gift. However if these conditions are not met, CGT may be due on the value as if it were a sale at market value. There are also CGT reliefs which could be used if CGT is payable.

    Income tax – It’s important to understand how you will fund a retirement and what levels of income tax you might need to pay. This could depend on whether you retain an interest in the family business and receive dividends or a salary, verses if you were to draw on a pension.

    Inheritance Tax (IHT) – This should be considered if a business is passed onto other family members, as IHT could become due. Rules around the reliefs available for qualifying businesses are changing from 6 April 2026, so now is the time to understand what liability could become due on your estate, and whether any planning can be undertaken to reduce the exposure to IHT.

    Get in touch

    For further information or advice on how we can help you navigate the challenges that come alongside running a family business or help you to plan for the future, please get in touch with a member of the team by emailing enquiries@pmm.co.uk or calling 01254 679131.

    Autumn Budget – are property taxes in the sights of the Chancellor?

    Posted on by Rebecca Campbell

    Property tax is once again under active review by the government, with speculation in the press ranging from a new ‘mansion tax’ to more fundamental changes such as replacing stamp duty or reforming council tax. These discussions highlight both the fiscal pressures facing the Treasury and the ongoing challenge of balancing fairness, revenue generation, and housing market stability.

    Property investment under pressure

    Property investors and landlords have faced a series of tax and regulatory changes in recent years. In April 2025, stamp duty rates were increased for buy-to-let purchases, following earlier reforms to renters’ rights. At the same time, the Royal Institution of Chartered Surveyors (RICS) has reported that the availability of rental housing has declined for 11 consecutive months, a trend that risks putting further upward pressure on rents.

    Unlike trading businesses, property investors do not benefit from the same reliefs for capital gains tax (CGT) or inheritance tax (IHT), and higher debt costs receive limited offset. Taken together, these factors have reduced the attractiveness of property as an investment class.

    Proposals under discussion

    Recent reports suggest that the Treasury is examining the possibility of replacing stamp duty with a proportional property tax on homes sold for more than £500,000. Unlike the current one-off levy, which can distort behaviour around transaction thresholds, a proportional tax would rise in line with property values and affect a narrower segment of the market.

    The government are also said to be considering an overhaul of council tax, which is still based on 1991 property valuations. Proposals include a shift to a modern, valuation-based local property tax collected from owners rather than residents.

    Property-related taxes already account for around 10% of UK tax receipts, nearly double the OECD average, making them a key component of fiscal planning.

    The wider context

    The government’s room for manoeuvre is limited. Commitments from the Chancellor to not raise income tax, VAT, or national insurance have shifted attention towards property as a more politically viable tax base. At the same time, a fiscal gap estimated at £40 billion has increased pressure to identify reliable revenue streams.

    Speak to an adviser

    Property taxation is likely to remain at the centre of fiscal policy debates in the months ahead. While the government is exploring reforms intended to improve fairness and stability, the challenge will be implementing changes without discouraging investment or further reducing housing supply.

    For landlords, investors, and businesses with property interests, the Autumn Budget could bring significant changes. Now is the time to review ownership structures, financing arrangements, and succession planning, so you are prepared to adapt quickly if reforms are announced. Speaking with your adviser early can help identify opportunities and mitigate risks in what remains a fast-moving tax landscape. Get in touch with property tax expert, Jonathan Cunningham, by clicking the link below.

    Planning ahead for Inheritance Tax changes to pensions

    Posted on by Rebecca Campbell

    Following the announcement by HMRC that draft legislation will be published later this year to bring most unused pension funds and death benefits within the value of a person’s estate for Inheritance Tax (IHT) purposes, it is vital to plan ahead. The changes will be effective from 6 April 2027 and while this marks a significant shift in how pensions are treated for IHT purposes, it also presents a perfect opportunity to review and strengthen your financial and estate planning strategies.

    What’s changing?

    Under the proposed rules, unused defined contribution (DC) pension pots and most death benefits will be included in the taxable estate. This means that pensions, which were previously exempt from IHT, could now be taxed at up to 40% on amounts exceeding the £325,000 nil-rate band (NRB), or £500,000 if the residence nil-rate band (RNRB) applies. Estates valued over £2 million will see a tapered reduction in the RNRB.

    Practical steps you can take

    To prepare for these changes, consider the following planning options:

    1.Review your pension arrangements

    Assess how your pension savings are structured and whether they fall within the scope of the new rules. Defined benefit (DB) pensions and death-in-service benefits may be treated differently, so understanding the specifics of your scheme is key.

    2.Update your estate plan

    Work closely with your financial adviser, tax planner and legal adviser to ensure your estate plan reflects the upcoming changes. This may include revisiting your Will, pension nominations, and the use of trusts or other vehicles to manage wealth transfer.

    3.Consider lifetime withdrawals

    Drawing down pension funds during your lifetime, especially if you’re already retired, could reduce the value of your estate and mitigate future IHT liabilities.

    4.Explore gifting strategies

    Making use of annual gift allowances or larger gifts (potentially exempt transfers) could help reduce the size of your taxable estate over time. Such gifts could be given directly or placed in a trust, it is best to seek professional advice on how best to do this.

    5.Stay informed and seek advice

    The draft legislation and HMRC’s response to industry feedback will provide further clarity. Staying up to date and consulting with a professional adviser will help ensure your plans remain compliant and tax-efficient. It could also be sensible to update your expression of wish form to make sure that appropriate beneficiaries (from an income tax perspective) will benefit from the pension so there is not penal income tax in addition to IHT.

    6.Consider whole of life cover

    A policy that pays out on death and can help cover any potential IHT liability. Placing it in trust may improve tax efficiency.

    7.Use charitable giving

    Leaving 10% or more of your net estate to charity can reduce the IHT rate from 40% to 36%, while supporting causes you care about.

    8.Explore business relief investments

    Investing in qualifying businesses may offer up to 100% IHT relief after two years, combining tax benefits with growth potential.

    Please note that you should always take advice before proceeding with any of these options.

    Looking ahead

    While the full details are still being finalised, the direction of travel is clear: pensions will no longer be a guaranteed IHT-free asset. Taking proactive steps now can help you adapt to the new landscape and protect the value of your estate for future generations. It’s also important to watch out for the upcoming Budget to see what other potential changes there might be.

    Get in touch

    For further information or advice on how the changes may impact you and your financial planning strategies, please contact 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.

    Inheritance Tax reform: key changes in the draft Finance Act 2025/26

    Posted on by Rebecca Campbell

    On 21 July 2025, the government published the first draft of the Finance Act 2025/26 which contains the draft legislation around IHT and the new rules around Business Property Relief (BPR) and Agricultural Property Relief (APR). Tax partner, Roger Phillips, explains more in our latest blog…

    Key highlights

    The draft legislation is largely as expected – albeit with two changes….

    1. The £1 million allowance will be indexed

    The standout announcement is that the new £1 million allowance for BPR and APR will now be indexed by inflation from 6 April 2030. This aligns with the expected uplift in the general IHT nil-rate bands – namely, the standard nil rate band and the residence nil rate band from that date.

    1. Anti-fragmentation rules will no longer take effect

    The anti-fragmentation rules that were expected to be brought in to deter individuals setting up multiple trusts to access greater levels of minority discount, will not take effect.

    However, where multiple trusts are set up by the same person, they will share a £1m allowance between them, and this will be allocated chronologically i.e. earlier trusts effectively getting the allowance before later ones.

    The thinking behind this is that if someone had instead made a gift to multiple individuals, then those gifts would get the benefit of minority discounts, and therefore if someone wished to gift by way of a transfer to a trust, rather than directly, then it would be discriminatory for there to be different treatment.

    HMRC consider that the sharing of the £1m between trusts should be sufficient to dissuade multiple trusts.

    They may well be right – and my view would be that if people did look to set up multiple trusts, then HMRC would likely pore over the terms of those trusts in the event that significant discounts were being sought – as if the terms were similar, a challenge under the general anti-abuse rule (also known as the “GAAR”) – would not be out of the question.

    HMRC’s stance on the reforms

    The government has justified these reforms on the basis that they will modernise and simplify BPR and APR while improving fairness in the system. The full policy paper outlines these objectives in greater detail, and it’s worth noting that the majority of the previously proposed changes remain intact in this first draft.

    What does this mean for families and trustees?

    With a firm implementation date of 6 April 2026, the clock is now ticking.

    Families, trustees, and business owners should urgently review their estate planning strategies and ownership structures to ensure they are well-positioned under the new rules.

    In particular, for those looking to make gifts into trust, there is a window between now and 5 April 2026 where there is more flexibility for planning.

    Final thoughts

    The BPR and APR changes are coming in from 6 April 2026, broadly as expected, therefore it is more important than ever that families speak with their advisers now to determine whether they should be reviewing their ownership structures before April 2026.

    Preparing your family business for the April 2026 Inheritance Tax changes

    Posted on by Rebecca Campbell

    From April 2026, the inheritance tax (IHT) landscape is changing – and family business owners could be among the hardest hit.

    A major reform is the introduction of a £1 million cap on Business Property Relief (BPR). This means only the first £1 million of qualifying business assets will receive 100% relief. Anything above that will qualify for just 50% relief – creating a potential 20% IHT charge on death.

    For family-run businesses, especially those that are asset-rich, this presents significant planning challenges. Tax partner, Roger Phillips, explains what you need to know – and how to prepare.

    What’s changing?

    Currently, BPR offers up to 100% relief on qualifying business assets – such as shares in private companies – enabling them to be passed on without triggering inheritance tax where various conditions are met.

    From April 2026, the rules will change:

    • 100% relief will apply only to the first £1 million of qualifying business assets.
    • Any value above that will receive 50% relief, and IHT will then apply at 40%, resulting in an effective 20% IHT charge.
    • The £1 million cap is per individual and, unlike other allowances, will not be transferable between spouses.
    • Trusts are subject to their own tax regime, and pay tax every 10 years based on the value of the assets that they hold. These trusts will benefit from their own £1m cap, although the same person won’t be able to set up multiple trusts to access more £1m allowances.
    • It is still possible for families to plan their succession in a tax efficient way, and there are some more options to plan before 6 April 2026 than there will be after that date.

    The impact of inheritance tax changes on family businesses

    Many family-owned businesses already exceed the £1 million threshold – especially when property, cash reserves, and retained profits are considered.

    Without early action, some estates could face significant IHT bills. Even if you’re not planning to exit or retire soon, succession planning should be at the forefront of peoples’ minds.

    What can you do now?

    Here are five key planning actions to consider:

    1. Review your ownership structure

    If the business is owned by one or two individuals, consider whether shares can be passed to family members or placed in trust. This may allow families to make use of multiple £1 million BPR allowances – but professional advice is essential as transferring assets can lead to unexpected tax charges.

    1. Explore lifetime gifts

    Gifting shares during your lifetime may still attract BPR. However, new anti-avoidance rules complicate the timing and treatment of such gifts. Early action could reduce your IHT exposure, speak to a tax specialist to understand your options.

    1. Trusts: act before it’s too late

    If you are considering transferring assets into trust, there may be a greater opportunity to place more value in trust before 6 April 2026 than there will after that date.

    1. Clean up your balance sheet

    Although the amount of relief that BPR gives is being reduced, it’s still a valuable relief and worth having. The amount of relief can be tainted by having surplus cash, investment properties, and other non-trading assets within a business. A balance sheet review can help ensure your business qualifies for the maximum available relief.

    1. Plan for cash flow and liquidity

    If your estate is likely to be subject to IHT, your beneficiaries may need liquid assets to cover the tax bill – potentially forcing a sale at an inconvenient time.

    Plan ahead with:

    • Life insurance written in trust to cover any liability
    • Shareholder agreements to facilitate share transfers or buybacks
    • Gifting strategies supported by formal valuations

    Next steps

    There’s still time to act – but the window is closing.

    With rising business valuations and tighter relief limits, more families than ever are at risk of a significant IHT bill. If your business assets are likely to exceed £1 million, we strongly recommend reviewing your estate and succession plans.

    Now is the time to:

    • Engage expert advice
    • Secure the right structures and protections
    • Futureproof your business for the next generation

    For tailored advice, contact Roger Phillips using the button below.

    Inheritance Tax receipts surge to £800 million in April 2025

    Posted on by Rebecca Campbell

    HMRC reported that Inheritance Tax (IHT) receipts reached £800 million in April 2025—a £97 million increase compared to April 2024. This is the second-highest monthly total on record and continues a long-term trend of rising IHT revenues. The growth is driven by frozen tax thresholds, rising asset values, and legislative reforms broadening the IHT net.

    The Office for Budget Responsibility (OBR) estimates that IHT receipts will exceed £9 billion in 2025/26, up from £8.2 billion in 2024/25. By 2030, nearly 1 in 10 estates are projected to fall within the IHT threshold.

    Tax partner Roger Phillips explains more…

    Understanding the rise in IHT Receipts

    Inheritance Tax is charged at 40% on the portion of an estate exceeding certain thresholds. Several trends and policy decisions are fuelling the recent increases:

    1. Rising property values
      Property price inflation—especially in London and the South East—means even modest homes now breach the nil-rate band (£325,000), pushing more estates into the IHT net.
    2. Frozen thresholds until 2030
      Both the nil-rate band (NRB) and the residence nil-rate band (RNRB) remain frozen at £325,000 and £175,000 respectively until April 2030. This long-term freeze effectively pulls more estates into IHT liability through fiscal drag.
    3. Major legislative changes announced in the 2024 Autumn Budget
    • Business and Agricultural Relief caps (from April 2026): reliefs for business and agricultural property will be capped at £1 million each and any value above this cap will attract only 50% relief. This marks a significant shift, particularly for estates involving farms or private businesses, which could now face substantially higher IHT bills.
    • Pension death benefits (from April 2027): undrawn pension funds and death benefits will be included in the deceased’s taxable estate—potentially increasing many families’ IHT exposure.
    • Non-dom regime changes (from April 2025): The abolishment of the non-dom regime and replacement with a residence-based system is set to bring more individuals within the UK IHT scope.

    Next Steps: how can families respond?

    With more estates falling into the IHT bracket, proactive and timely estate planning has never been more critical. Key steps you can take include:

    • Make use of allowances and reliefs
      Various allowances and reliefs can reduce your IHT liability, including the annual gift exemption (£3,000 per year) and reliefs for gifts made out of surplus income.
    • Lifetime gifting
      Gifts made during your lifetime beyond the annual exemption can start the required seven-year clock. Gifts to registered charities are usually exempt from IHT, which can help reduce the overall taxable value of your estate.
    • Utilise trusts
      Establishing trusts can be a strategic way to pass assets to beneficiaries while minimising IHT. Trusts also offer control over how and when assets are distributed and can provide tax advantages. If trust planning is being considered, it may well be sensible to have completed this before 6 April 2026, before the rules change, as currently there may be the possibility to make transfers of business property into trust before then, without incurring significant tax charges. Advice should always be sought.
    • Review your will regularly
      Ensure your will reflects your current financial situation and estate planning goals. This helps ensure your assets are distributed according to your wishes while taking advantage of available reliefs.
    • Take early action
      Following the 2024 Autumn Budget announcements, many families will need to rethink their succession planning strategies. Given the impending changes, a proactive approach is vital. Reviewing asset values and understanding the IHT implications under the new rules is an important first step. This may involve restructuring ownership, exploring trusts, or other tax-efficient vehicles to manage potential liabilities.
    • Obtain professional advice
      Given the complexity of these rule changes and looming reforms, expert tax and estate planning advice is essential to build a robust strategy tailored to your circumstances. Working closely with a tax adviser can help optimise asset allocation, utilise alternative reliefs, and establish succession structures that minimise tax impact on business continuity and family legacies.

    Get in touch

    The sharp rise in IHT receipts signals that is time for families to act sooner rather than later. With significant changes on the horizon, proactive planning today can mean substantial tax savings in the future.

    If you’d like to discuss your personal circumstances and how these changes might affect you, get in touch with Roger Phillips by clicking the button below.

     

    Autumn Budget 2024 – understanding the impact of IHT changes on family businesses and farms

    Posted on by Rebecca Campbell

    We sat down with PM+M tax partners, Roger Phillips and Wendy Anderson, to find out more about the inheritance tax (IHT) changes announced in the Autumn Budget on 30 October 2024, with a focus on Business Property Relief (BPR) and Agricultural Property Relief (APR), and what those changes are likely to mean, in particular, for families with businesses and farms….

    Changes to APR and BPR and the effect on family businesses

    First up, we were joined by Roger, who answered some questions on the changes to APR and BPR.

    Roger explains what the Chancellor’s announcements mean for family businesses.

    Can you summarise the changes that the Chancellor made to BPR and APR in the Budget on 30 October?

    “The Chancellor announced significant changes to BPR and APR, which will, in the main, take effect from 6 April 2026.

    The effect of BPR is that is has always applied to give tax relief on death in relation to certain types of “business assets,” including shares in family companies and assets used by sole traders or partnerships, giving relief of up to 100% in the death estate. What that means in simple terms is that if you held shares in the family trading company, you could die whilst holding those shares – whatever their value – and their value shouldn’t attract an IHT charge.

    APR applies in a similar way – typically to farms and farmland which are either owner occupied by the farmer themself, or where they are let to tenant farmers. APR works by removing the “agricultural value” of the farm from the estate when working out the IHT.

    These reliefs have been available for decades and have operated to ensure that family farms and businesses can be passed down the generations, without triggering punitive IHT charges that could otherwise cause families to have had to sell those assets, to generate some money to pay the taxman.

    The new rules effectively tear up the rulebook that everyone has become so used to. Now, individuals will be entitled to a £1 million allowance on their combined APR and BPR assets at death and any value over and above that allowance is then potentially subject to IHT.

    Assets falling within the £1m threshold at death will be entitled to 100% relief (BPR and APR – although there is only one allowance per person) and the balance of value attributable to any BPR/APR qualifying assets that aren’t sheltered by the £1m will then receive only 50% relief.

    IHT will then be applied to that remaining 50% at the normal 40% rate – and that will therefore mean an IHT rate of 20% on that proportion of the assets.”

    What will this mean practically for family businesses?

    “For family businesses, these changes are likely to lead to a IHT bills where the values of the business assets exceed £1m (assuming their other allowances have been used up already).

    IHT is payable within 6 months of the death, and therefore families will have to find this money to fund the tax. In addition, it may well be the case in some circumstances that income tax charges could be triggered as part and parcel of families accessing these funds to pay the taxman.

    In many cases it will be possible to pay the tax in 10 equal annual instalments, although this isn’t a perfect solution.

    Many family businesses have relied on BPR to pass shares down without triggering IHT and there are many elderly shareholders now in a position where they will not know what the most sensible thing to do is.

    They have been holding onto shares, thinking they were safe in the knowledge that they could pass the shares onto their children without IHT. This has changed completely.

    Family businesses may want to consider strategic steps such as early gifting to move value out of the estate, or to access other individual’s £1m allowances, creating family trusts, or restructuring ownership to minimise IHT exposure, with a view to safeguarding the family’s long-term business interests.

    If gifts are being made, then CGT always needs to be considered. Term insurance might also need to be considered as a means to generate some cash to pay tax on gifts that aren’t survived by 7 years.

    This all needs careful thinking through – and every family’s circumstances will differ.

    As well as tax, there will be commercial and family considerations to think about.

    Is it sensible for a 20-something year old – who may get married – then may get divorced – to receive and hold valuable shares in the family company?

    Trusts may offer some protection against this, but post April 2026, there will be a cost to transferring shares into trust where their value is high. Up until now, trusts have offered a genuine solution as a means of protecting assets for families.

    There might still be a window of opportunity here to undertake some planning until the rules come into effect fully.

    Business owners should also be having their wills reviewed to make sure they are as tax efficiently drafted as possible. This is important because the £1m allowance is not likely to be transferable to a spouse – unlike the nil-rate band – and therefore families should ensure their affairs are structured as to maximise availability of the new reliefs.”

    Is it as simple as giving my shares away in the family company now?

    “No.  Each case is different. Ages of shareholders and family dynamics will all need to be thought about carefully in the context of gifting.

    A gift of shares made now will only fall to be treated under the old rules – meaning full IHT relief – if the donor dies before 6 April 2026.

    A gift now would fall under the new rules – i.e. partial relief – if the donor passes away after on or after 6 April 2026 and within seven years of the gift having been made, where that gift has been made on or after Budget day.”

    I have already made some gifts during my lifetime – how are these impacted by the new rules?

    “According to the limited guidance that the government has issued, it appears that pre-Budget day gifts will generally still be subject to the old rules if the donor were to pass away within seven years after having made a gift – even if this death takes place after 6 April 2026.

    There’s therefore some protection for those that made gifts before the Budget.”

    Are there likely to be further changes to IHT in future Budgets?

    “There could well be. We are likely to see more in the way of gifting, with families hoping that gifts can be survived 7 years so that they drop out of the donor’s estate.

    The next step could be for the 7 year rule to be looked at – and you could envisage them extending it to try to collect some more tax.”

    What should I do next?

    Do not rush into anything yet – speak to us in the first instance.

    The government have only, at this stage, released some relatively scant guidance. More detailed information is set to follow in the early new year – and hopefully we will receive some draft legislation in the not-too-distant future.

    I would suggest some early conversations with your tax adviser/lawyers would be sensible, with more detailed guidance being sought once we have a bit more clarity, before deciding what, if anything, you should do.”

    How will changes to BPR and APR affect farmers?

    Next up, we are joined by partner, Wendy Anderson, who focuses on how the Budget announcements could affect farmers…

    Can you explain how a typical farmer might be impacted by these changes?

    For farmers, these changes could mean a reduced relief on larger agricultural estates – including farms and landed estates.

    Currently, most farmed agricultural land can qualify for 100% APR if certain conditions are met. Some farmland qualifies for relief at a reduced 50% rate.

    Under the new rules, the first £1 million of agricultural value will qualify for 100% APR, and any value beyond that will be relieved at 50% – in the same way as for BPR.

    This change could impact farmers whose land value significantly exceeds the £1 million threshold, possibly leading to IHT liabilities at death from 6 April 2026 onwards.

    If you think of a typical 200 acre farm, made up of agricultural land with a value at £10k per acre – that’s £2m of value. Assuming there’s a house and some other assets in the estate, there will be IHT to pay on death.

    Should I consider giving my farm away now?

    Transferring assets now may not necessarily be the best solution. Each case needs careful thought and there might be some alternative options worth exploring.

    Each individual situation is unique, so I would recommend getting in touch with your PM+M tax adviser to discuss your circumstances in more detail before acting.

    Are trusts impacted by these new changes?

    Yes, trusts are impacted. Trusts pay IHT every 10 years – currently at up to 6% of the value of the assets in the trust. Although where those assets qualify for BPR/APR, they, until now, have typically not been subject to this charge. From 6 April 2026, this will change and trusts will be subject to the new rules around APR/BPR.

    Existing trusts that were set up before 30 October 2024 will have their own £1 million allowance to use against BPR/APR property when calculating the 10 year charge, whilst “new” trusts established on or after Budget day will share a single £1 million allowance if they have been created by the same person.

    It’s not completely clear how trusts will be affected for value over the £1m – it is likely that a 3% effective rate will apply every 10 years to BPR/APR property in excess of the £1m – although we need more guidance from the government on that.

    Under the old rules, some of my farm qualified for 100% APR and some qualified for 50% – will these differences still be recognised by the new rules?  

    Yes, the distinctions in relief percentages will largely be retained under the new rules.

    Agricultural assets currently qualifying for 100% APR will remain eligible for full relief up to the £1 million threshold. Assets previously receiving 50% APR or BPR will continue to be treated as 50% relieved and will not fall into the new £1 million allowance.

    How much detail do we actually have at this stage?

    Whilst the government has provided the basic framework, we are still awaiting some specific detail.

    For example, there are questions regarding the ‘refreshing’ of the £1 million allowance, how reliefs will be apportioned between APR and BPR, and the exact application of these rules to trusts.

    The consultation in early 2025 is expected to clarify these points.

    Could Labour U-Turn on this?

    In theory, yes.

    Farmers are sometimes referred to as asset rich and cash poor. For larger farms that aren’t covered by the £1m allowance, and the normal nil rate bands (which for a husband and wife can give another £1m of allowance), IHT will need to be paid within 6 months of death.

    Finding that cash may be a challenge – particularly if it has to be extracted from a company – in which case there would be associated income tax charges. The IHT can be paid in 10 equal instalments, but clearly that’s not a perfect situation.

    The income tax point might be moot if farmers have to sell land to generate cash, just to pay the IHT.

    Farmers are worried, and very vocal about this. I suspect if there are to be any “U turns” in relation to this Budget, then the “Tractor Tax” might be the one which is reconsidered. It will unlikely be a complete U turn – but there might be some additional protections built into the new rules.

    Get in touch

    If you’re concerned about how the recent changes to BPR or APR could impact your family business or farm, now is the time to start planning.

    Reach out to our experienced tax advisers at PM+M to discuss your options and ensure your succession planning is robust enough to minimise the potential IHT burden.

    Roger Phillips – roger.phillips@pmm.co.uk

    01254 604337

    07719 020342

    Wendy Anderson – wendy.anderson@pmm.co.uk

    01254 604304

    07384 257578

    Autumn Budget 2024: Inheritance tax reforms and their impact on businesses and agricultural succession

    Posted on by Rebecca Campbell

    The latest Autumn Budget (30/10/24) announcements have introduced significant changes to Inheritance Tax (IHT), particularly affecting Business Property Relief (BPR) and Agricultural Property Relief (APR). From 6 April 2026 both APR and BPR will be subject to a combined £1 million limit. This means farmers and  business owners face capped reliefs on agricultural and business property and will be subject to an effective 20% inheritance tax rate over the £1 million threshold from 2026.

    Key changes

    APR currently allows a person to pass on the agricultural value of some property in the UK free of IHT. This includes land or pasture used to grow crops or rear animals and farm buildings where all of the conditions are met.

    Assets that may qualify for BPR include: a business or an interest in a business; land, buildings or machinery used in a business; and shares in an unlisted company. Where BPR is available, the value of an asset can be reduced by 50% or 100% when working out the IHT due.

    However, at the recent Autumn Budget, it was announced that the government will reform APR and BPR from 6 April 2026. The 100% rate of relief will continue for the first £1m of combined agricultural and business property, falling to 50% thereafter.

    The rate of BPR will also fall to 50% in all circumstances for shares designated as “not listed” on the markets of recognised stock exchanges, such as AIM.

    Example:

    A family farm valued at £6 million, previously transferable tax-free upon the farmer’s death, will now incur a £1,000,000 tax liability.

    The reduction in BPR and APR will be acutely felt by business owners during transitions, especially in the circumstances of an unexpected death of the owner or a major shareholder.

    This change will also affect assets qualifying for APR and BPR which have previously been placed into trusts for asset protection and family wealth planning.

    Reduced reliefs may result in immediate tax liabilities which are payable within 6 months of death or a qualifying chargeable event for a trust, potentially forcing asset sales or diverting funds needed for business operations. This financial strain can be particularly destabilising in rural and farming communities, where significant asset values are tied up in land and infrastructure and therefore difficult to liquidate to provide the funds necessary to pay the IHT.

    Plan ahead

    With the new Budget announcements, many families will need to rethink their succession planning strategies to maintain their land and operations and, given the impending changes, it is crucial that they take a proactive approach to succession planning. Reviewing asset values and understanding the IHT implications under the new rules is an important first step. This may involve restructuring ownership, exploring trusts, or other tax-efficient vehicles to manage potential liabilities.

    Working closely with an accountant can provide tailored strategies that address each business’s unique circumstances. Effective planning, whether through optimised asset allocation, alternative reliefs, or succession structures, is key to minimising the tax impact on business continuity and family legacies.

    Contact us

    The upcoming changes to IHT represent a significant shift in how business and agricultural assets are taxed upon inheritance. The 2026 implementation date may feel like some time away and the Government is yet to publish its detailed technical advice in respect of this announcement, but the need to take action starts now to preserve financial stability.

    Now is the time to engage with experts, secure the right policies, and take the necessary steps to protect your business’s future. Contact Jayne O’Boyle ( jayne.oboyle@pmm.co.uk) or Jonathan Cunningham (jonathan.cunningham@pmm.co.uk) or call 01254 679131 for more information and guidance.

    Exit planning – insights for business owners approaching the finish line

    Posted on by Rebecca Campbell

    Exiting the business you have worked hard to build can be a difficult transition. It’s therefore essential to have a well-structured plan in place that aligns with your goals, prepares you for challenges ahead, and ultimately, secures your financial future. In our latest blog, we explain the key reflections that business owners should consider when in the process of exiting their business.

    Reflect on your goals

    As you approach the final stages of your exit, now is the time to reflect on your journey and revisit your initial goals. Before finalising the details, take a moment to ensure everything is in order, for example, are there any unresolved issues that could stop you from achieving your goals? Are your tax affairs in order? Now is the time to ensure your goals are clearly defined and there are no outstanding issues which may need attention before your final exit.

    Secure the future of your business

    Ensuring your business continues to thrive upon your exit is likely to be a top priority – but is your successor ready to take the helm? Whether it’s a trade buyer, your management team, a private equity firm, or a family member, they will be responsible for steering the business forward. Ask yourself: is your successor prepared to take the role? Are they fully aligned with your vision and the values of your company? Ensuring a smooth transition will be key to the continued success of your business.

    Protect your financial future

    As you near your exit, protecting the wealth you’ve worked hard to build should be a key focus. Have you considered your personal tax position? Whether it’s inheritance tax exposure or capital gains tax liability, having your financial affairs in order is crucial to secure your financial future. Given the unique nature of every business owner’s financial situation, now is the ideal time to seek advice from tax and financial planning specialists to ensure you’re in a secure and compliant position ahead of your exit.

    The impact on your team

    Whether you have worked with the same team throughout the entire exit journey, or you have attracted new employees to manage the transition – it’s important to consider the effect your exit will have on your people. Open and honest communication is often the best approach (once your exit is set in stone). Have you had the necessary conversations with your team? Does everyone know where they stand? If not, now could be the time to begin as clear communication can help prevent disruptions and mitigate the risk of losing key employees as you prepare to exit.

    The timing of your exit

    Have you thought about how quickly you intend to leave the business? If an external buyer is taking over, they may require you to stay on temporarily to ensure a smooth handover. If you want a quick exit, what steps can you take now to make the transition more efficient? If the plan is more gradual, how can you continue to add value whilst you are still around?

    Plans for the future

    As your exit approaches, are you ready to leave your business behind? For many entrepreneurs, their business has been a source of purpose, and inevitably will have taken up a lot of time! Have you thought about how you’ll spend your time upon exit? Whether it’s exploring new hobbies, travelling, spending time with loved ones, investing in new ventures, or giving back to causes you care about, having a plan for post-exit is essential.

    Get in touch

    Exiting your business is a significant milestone, and having the right support in place is crucial. Our team of corporate finance specialists are here to guide you every step of the way, collaborating with PM+M’s tax and financial planning experts, to ensure you make informed decisions that align with your long-term goals.

    To arrange a no-obligation, confidential chat to discuss your personal circumstances in more detail, contact enquiries@pmm.co.uk

    IHT receipts reach £2.1bn between April and June – what does this mean for you?

    Posted on by Rebecca Campbell

    HMRC has released data showing that inheritance tax (IHT) receipts reached £2.1 billion between April and June 2024. This significant figure has implications for many UK families – what does this rise in IHT receipts mean for you?

    Understanding the rise in IHT receipts

    Inheritance tax is a levy on the estate (property, money, and possessions) of someone who has died. The standard IHT rate is 40% on anything above the £325,000 threshold (known as the nil-rate band). Several factors contribute to the rise in IHT receipts:

    1. Increasing property values: the continuous rise in property prices has pushed more estates above the IHT threshold. Even modest family homes in certain parts of the UK can easily surpass the nil-rate band, leading to higher tax liabilities.
    2. Static thresholds: the IHT threshold has remained frozen since 2009 and will currently remain so till 2028 at the earliest, meaning that more estates fall into the taxable category as inflation and asset values increase.
    3. Legislative changes: recent changes in tax policies, such as the introduction of the Residence Nil-Rate Band (RNRB), while offering some relief, still leaves many estates liable for substantial IHT, especially for those not meeting the conditions for the additional allowance.

    What are the implications for UK families?

    The rise in IHT receipts indicates that more families are affected by inheritance tax than ever before – meaning proactive estate planning is more important than ever. Without proper planning, a significant portion of your estate could go to HMRC, rather than your loved ones.

    We have highlighted various ways you could potentially reduce your IHT liability:

    • Make use of allowances and reliefs: there are various allowances and reliefs available that can reduce your IHT liability. These include the annual gift exemption, which allows you to gift up to £3,000 per year without incurring IHT, and the inheritance tax reliefs for gifts made out of surplus income.
    • Consider lifetime gifts: gifts made during your lifetime not falling within the annual exemption limit can set the required 7 year clock running. Additionally, gifts to charities are usually exempt from IHT, which can help reduce the overall taxable value of your estate.
    • Utilise trusts: establishing trusts can be a strategic way to pass assets on to beneficiaries while minimising IHT. Trusts can be used to control how and when assets are distributed and can also offer potential tax advantages.
    • Review your will regularly: Regularly updating your will ensures that it reflects your current financial situation and estate planning goals. This can help ensure that your assets are distributed according to your wishes whilst taking advantage of available tax reliefs.
    • Seek professional advice: Given the complexities of IHT legislation and estate planning, consulting with a tax adviser can provide valuable insights and strategies tailored to your individual circumstances.

    Planning for the future

    The rise in IHT receipts is a clear signal for to reassess your estate planning strategies. As tax advisers, we are here to help you navigate these complexities and ensure that your assets are passed on to your loved ones with minimal tax liabilities.

    Stay informed, plan ahead, and seek professional advice to ensure your legacy is preserved for your loved ones.

    If you haven’t reviewed your estate plan recently, now is the time to do so. With proper planning and professional guidance, you can take steps to protect your estate from substantial inheritance tax charges. Contact us today, by emailing enquiries@pmm.co.uk,  to discuss how we can help you plan effectively and secure your family’s financial future.

     

     

    Changes to income tax charges for trusts and estates now in force

    Posted on by Rebecca Campbell

    The 2023 Spring Budget introduced changes affecting the way trusts and estates are charged to income tax – and they came into force last month, effective from 6 April 2024.

    In our latest blog, tax partner, Wendy Anderson, explains what these changes mean…

    What are the changes?

    Trusts and estates with income of £500 or under, from interest, dividends or rent, will not have to file a return from 2024/25 onwards. The tax liability of trustees and personal representatives in such cases will be considered nil.

    For trusts and estates with incomes exceeding £500 from all sources, the entire income will be subject to taxation at the ‘basic rate’ in the case of an estate, or at the ‘rate applicable to trusts’ for trustees.

    The £500 limit is reduced proportionally where a settlor has established more than one trust to a minimum of £100 per trust, but this excludes interest in possession trusts, settlor interested trusts, vulnerable beneficiary trusts and heritage maintenance trusts.

    This reform supersedes the previous concession for estates which meant that if the sole income was interest, and the tax due totalled less than £100 (i.e. less than £500 of interest income per year), then no tax was reportable or payable. The ‘starting rate band’ for trusts, allowing the initial £1,000 of trust income to be taxed at basic rates rather than the rate applicable to trusts, will also be abolished.

    Beneficiaries of an estate are also affected by the recent changes where the income is below the £500 limit. In this case, the ‘net income’ of a UK estate is treated as £nil and therefore is not chargeable in the hands of the beneficiary when distributed from the estate.

    However, it’s important to note that for trusts, the exemption does not override or replace the tax credit and tax pool charge associated with discretionary income distributions. Trustees will therefore still need to pay sufficient tax to frank an income distribution (currently 45%).

    Are there any other changes on the horizon?

    HMRC have hinted at their intention to make changes to Inheritance Tax (IHT) regulations to remove non-taxpaying trusts from reporting requirements. If this was to go ahead, it would be a welcome change for many trusts that, despite there being no IHT due on an exit or 10 year anniversary, are still required to submit a return because the value of their assets exceeds 80% of the available nil rate band.

    However, we haven’t heard any further detail on these proposals, and with rumours of IHT being scrapped altogether, it may mean these changes are not implemented.

    We will keep you updated as and when further information is provided by HMRC.

    Get in touch

    If you are concerned about the changes to income tax charges for trusts and estates or would like to speak about your personal circumstances in more detail, please contact Wendy Anderson by clicking the button below.

    Financial planning considerations for the new tax year

    Posted on by Rebecca Campbell

    With the new tax year underway, it could be a perfect time to review your finances and consider how to make the most of your allowances and investments for the year ahead to gain optimum benefit. Below we consider some of the areas where utilising the allowances available could make a huge difference and potentially save you a substantial amount of money.

    ISA Allowance

    The new tax year means a fresh ISA allowance of £20,000. ISAs can provide tax free benefits for your savings and investments, allowing you to benefit from higher returns over the long term. Maximising your allowance early can allow more time for your investments to grow, free from capital gains and income tax.

    Pension Contributions

    Most pension savers can contribute up to £60,000 per annum into their pension, however, advice should always be taken as an individual’s allowance can be restricted to an amount less than £60,000 due to complexities with the rules. Similar to the ISAs, pensions are tax efficient savings vehicles which can be accessed from the minimum pension age. Your pension can be used to invest in various different investments including cash savings, investment portfolios and commercial property.

    Also, if you haven’t utilised your allowance from the previous three years, it is possible to carry it forward and boost your pension pot further, subject to certain criteria.

    Capital gains tax allowance

    From April 6 2024, the capital gains tax allowance was reduced from £6,000 to £3,000 per person. If find yourself in a position where you have maximised both your pension and your ISA allowance, you could consider investing into a General Investment Account and crystallise your gains on an annual basis using your capital gains tax allowance.

    Dividend allowance

    Rather than investing in growth assets, there is the option to invest into income distributing funds. Any dividend received on unwrapped investments can be claimed tax free if it falls within your Dividend Allowance, the allowance fell from £1,000 to £500 on the 6 April 2024.

    Inheritance Tax

    You are able to give up to £3,000 each year completely free of any inheritance tax (IHT) liability, this can be a useful way to reduce a potential inheritance tax bill, as well as helping out your family with a financial gift.

    The tax-free inheritance threshold is £325,000 per person, above which 40% rate of tax is due (subject to other allowances).

    You can gift more should you wish but if you died within seven years of the gift, the recipient could be subject to a large IHT bill. You are also able to carry over your allowance to the following tax year so if you haven’t used any of your allowance during the previous tax year, you could potentially gift up to £6,000 without any tax liability.

    Get in touch

    For further information or advice on how you can plan ahead to make the most of your finances and maximise the tax allowances available to you, contact a member of our financial planning team today to talk through your personal circumstances 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.