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Protecting Your Assets from Inheritance Tax

Inheritance tax (IHT) can reduce the number or value of assets you are able to leave behind for your family and loved ones. Lupton Fawcett can help you explore the options available to ensure you make the most of your assets and protect them from IHT.

Our specialist trust, wills and probate team will provide you with tailored legal advice to suit your needs and help you through the relevant processes to ensure your assets are well protected.

To speak a solicitor about protecting your assets from IHT, get in touch with us today by calling 0333 323 5292. Alternatively, fill in our online enquiry form and we will get back to you as soon as possible.

What is Inheritance Tax?

IHT is a tax levied by the government when assets are gifted during your lifetime or following your death. This can include:

  • Anything you own at the date of your death, for example:
    • Your property
    • Your bank accounts
    • Any investments
    • Your personal belongings, such as cars, jewellery, antiques and expensive goods
  • Anything you own jointly with a spouse or another person
  • The value of a trust fund you are entitled to
  • Any gifts you have made over the last seven years before your death that are not covered by exemptions

Anyone who was born in the UK, moved here and severed ties with their country of birth, or lived in the UK permanently for 17 of the last 20 years will be liable to pay IHT on the UK assets.

Do I Have to Pay Inheritance Tax?

Any assets up to the value of £325,000 will not be subject to IHT; this is known as the nil rate band (NRB). If you are leaving assets worth more than £325,000, or £650,000 for a married coupled (subject to certain rules), you will be expected to pay IHT at a rate of 40% on the value of your estate in excess of the NRB.

If you pass on property that you have lived in to a direct lineal descendant, an additional £100,000 will be added to the NRB. The residence nil rate band (RNRB), as it is known, will increase yearly until 2021 as follows:

      • £100,000 in 2017 to 2018
      • £125,000 in 2018 to 2019
      • £150,000 in 2019 to 2020
      • £175,000 in 2020 to 2021

After 2021, the increase will be in line with the Consumer Prices Index (CPI). 

You can organise matters to avoid IHT by giving gifts while you are well outside of the seven-year period where gifts will be counted towards any IHT you have to pay. Trusts can be used if you are nervous about making direct gifts or want to protect assets from being lost to divorce or business failure. There is also a number of tax exemptions and reliefs available to help you protect your estate. Our solicitors can advise you on the best options and help you structure your will to maximise on your assets.

Examples of Inheritance Tax Exemption

There is a number of ways to avoid Inheritance Tax exemption in line with UK law. Examples of IHT exemptions include:

  • Transferring money and assets between spouses and civil partners - it is important to remember that any assets transferred will increase the value of their estate
  • Using your deceased partner’s nil rate band if they have not made full use
  • Making a gift to a charity
  • Owning a trading business or agricultural property

For more information on IHT tax exemptions or to discuss your circumstances with an expert solicitor, contact Lupton Fawcett today.


Many people take out life insurance to help their loved ones cover bills after their death. If you put the insurance policy into a trust, it will not be included as an asset for inheritance tax but can be paid out during the probate process.

In fact, you can also take out a ‘Whole of Life’ policy in order to cover the cost of inheritance tax. This policy is also held under trust and enables your heirs to pay any inheritance tax bill straight away.

How We Can Help

Lupton Fawcett’s trust, wills and probate team has years of experience in helping individuals arrange their financial affairs in the most tax efficient way possible to give peace of mind that assets are protected and will go to beneficiaries. Thanks to our experience, we have the knowledge to tailor advice to suit your individual requirements, while we endeavour to keep up to date with any changes to legislation that may affect the transferral of assets. 

Talk to Us

For advice on protecting your assets from IHT, contact our Leeds, Sheffield or York office today to speak to a member of our team by using the details below.

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