Estate planning information

If you want to leave money or property to loved ones, make sure to think about Inheritance Tax (IHT).

Each year the government sets two IHT thresholds called:

• The Nil Rate Band, set at £325,000 per person, fixed at £325,000 until April 6, 2021
• The Residence Nil Rate Band, which is £100,000 in 2017/18 and will increase as shown in the table below

Where you are eligible, if your estate is worth less than these, it may not be subject to inheritance tax Usually anything above these bands will be taxed at 40% (unless at least 10% of the deceased's estate has been left to charity, then the rate is 36%).

Residence Nil Rate Band

The Residence Nil Rate Band was introduced from April 6, 2017 and this can be added to the existing £325,000 band where a home (or the proceeds from a previous home) is left to children (including step, foster and adopted children), grandchildren or great grandchildren.

Future increases to the Residence Nil Rate Band mean that by April 6, 2020 eligible individuals will have the potential to pass on assets worth up to £500,000 without paying any Inheritance Tax.

This is being phased in as follows:


Tax year Additional residence nil rate band Existing nil rate band Potential combined nil rate band for an individual
2017/18 £100,000 £325,000 £425,000
2018/19 £125,000 £325,000 £450,000
2019/20 £150,000 £325,000 £475,000
2020/21 £175,000 £325,000 £500,000
2021/22 onwards will increase in line with the Consumer Price Index £325,000

For married couples and civil partners, the total could be up to £1 million if they are eligible. However, there is a gradual withdrawal of this relief for estates worth more than £2 million which means that in 2020/21 there is effectively no additional band for estates over £2.35 million and couples with estates worth more than £2.7 million. For more information see GOV.UK Residence Nil Rate Band (RNRB)

Planning your estate

Our Financial Planning Managers can help you to understand if you have a potential Inheritance Tax liability by simplifying what can be a very complex subject.

You'll also have access to a Will-writing service through our legal services provider, Irwin Mitchell 1

You can also talk through your finances with us to help you check your financial plans are on track to achieve your financial goals.

Our Financial Planning Managers offer advice on a limited range of carefully selected Investment and Protection products and funds available through Cofunds and Legal & General

Tax exemptions

Anything you gave away within seven years of your death also gets taxed, although there are exceptions – for a list of exemptions, see GOV.UK Inheritance Tax - Gifts. You could also look into the possibilities of leaving assets and money in trusts.

1 Irwin Mitchell LLP is a limited liability partnership registered in England & Wales, with number OC343897, and is regulated by both the Solicitors Regulation Authority (SRA number 509694) and the Law Society of Scotland. The word ‘partner’, used in relation to the LLP, refers to a member of the LLP or any employee of, or consultant to, the LLP (or any affiliated firm) who is a lawyer with equivalent standing and qualifications. A list of the members of the LLP, and of those non-members who are designated as partners, is displayed at the offices of Irwin Mitchell.

Will writing and estate planning, including the Trustee Act 2000, are not regulated by the Prudential Regulation Authority or Financial Conduct Authority.