Inheritance Tax Planning

You probably have a good idea who you want to inherit your estate and the type of legacy you want to leave behind.

Yet if the value of your loved ones' inheritance is above your threshold, they might have to pay an inheritance tax bill that could amount to thousands of pounds.

What is your personal threshold?

Your inheritance tax threshold is £325,000 if you’re single or divorced or up to £650,000 if you’re married, in a civil partnership or widowed.

The government is gradually bringing in a residence nil rate band – worth £125,000 per person for the 2018/19 tax year. This can be used in addition to your main threshold and only applies if you are passing on a property that you have lived in, which has been inherited by a direct descendent (children or grandchildren).

What makes up your estate for inheritance tax?

Your estate is not just your home. It includes almost everything you own – your car, your savings and investments, your jewellery, your antiques, and even your home furnishings. It could also include gifts you have made within the last seven years. It might surprise you just how much your estate adds up to.

Since the main inheritance tax thresholds were raised to £325,000/ £650,000 in 2009, annual inheritance tax revenue has more than doubled to reach record high levels – and it’s forecasted to keep rising^. The traditional view that it only affects the richest people has changed. If you’re not sure if your loved ones will be affected, it’s important to find out.

When I realised I had a potential inheritance tax liability I got in touch with Skipton. I knew what I wanted to do. I just needed advice on how to do it. The planning we have done has given me peace of mind – as I do not want my family paying inheritance tax when I have gone if there is something that I can do about it.

Financial advice customer Mr Ridehalgh, Lancashire

How can we help?

Firstly, we can support you in finding out if inheritance tax is something you need to plan for. We can guide you through calculating the value of your estate, and – if inheritance tax might apply – help you to consider your next steps.

By taking the time to understand your circumstances and objectives, we can present personalised recommendations to start addressing any inheritance tax liability. Some inheritance tax solutions require at least seven years to be fully effective, so it’s wise to start considering your options sooner rather than later.

^Source: Office for Budget Responsibility March 2018 forecast

In the 2017/18 tax year, it is forecasted that HMRC will collect a record £5.32 billion in inheritance tax receipts.^

Our recommendations are likely to include stock market-based investments. These are not like bank and building society savings accounts as your capital is at risk and you may get back less than you invested. The value of your investments and any income from them may fall as well as rise. Inheritance tax thresholds depend on your individual circumstances and may change in the future. Some areas of inheritance tax planning are not regulated by the Financial Conduct Authority.

Call now for a free consultation

For more information on our service and to find out whether you could benefit from financial advice, call our specialist team today for a free consultation over the phone. Find out if you could benefit from financial advice. Call today for a free telephone consultation.

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