How to avoid paying inheritance tax

Without proper guidance and financial support, Inheritance Tax (IHT) can cost families hundreds of thousands of pounds. This guide will show you how to pass on your assets efficiently and reduce your inheritance tax bill.

Senior couple happy now inheritance tax is reduced

Protect your assets

Unfortunately, you can’t live forever – but you can ensure that your family inherits as much of your wealth as possible.

If your total assets are over the inheritance tax threshold of £325,000, your family will have to pay inheritance tax.

Inheritance tax is a percentage of money taken from an estate by the government upon death, this can be up to 40%.

By taking action early, you can protect your family from unexpected inheritance tax bills. There are many ways to reduce inheritance tax. These include:

Making a Will

Making Gifts

Using your Allowances

Using Your Exemptions

Setting up a Trust

Investing Tax-efficiently

Spending More

By working with an independent financial adviser, you can reduce your inheritance tax bill, increasing the amount of money received by your beneficiaries.

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How John & Jane saved over £250,000 in inheritance tax

John and Jane are in their early 70s. They are both retired and receive enough income from their State Pensions and final salary pensions.

senior couple reassured they've reduced their inheritance tax bill

Over their lifetime, they have accumulated a range of assets, including their home, a holiday home, defined contribution pensions, stocks and shares ISAs as well as investment bonds.

The total value of their estate is around £3m. They are concerned about how much inheritance tax their family will pay when they eventually die. They have worked hard and want their savings to be passed on tax-efficiently.

By working together, we were able to save John and Jane’s beneficiaries over £250,000 in inheritance tax. This was done by:

1. Placing assets into trust (IHT saving = £130,000):

This ensured that the assets were outside of their estate for inheritance tax purposes, however still provided them with access to some of the income.

2. Improving their pension death benefits (IHT saving = £100,000):

This ensured that their beneficiaries could inherit their pensions free of inheritance tax, rather than have it paid out as a taxable lump sum and included within their estate.

3.Making use of their allowances (IHT saving = £20,000):

We established a regular gifting plan that used their annual allowances in a flexible and tax-efficient way. This allowed their children to benefit from the money now whilst reducing the value of their estate.

John and Jane now feel much more at ease with their estate planning. They have a plan that maximises the value of their estate, whilst minimising the amount paid in inheritance tax.

Who are Frazer James?

We are award-winning Chartered and Certified independent Financial Advisers based in Bristol. We provide expert inheritance advice to help our clients protect their wealth and pass on as much as possible to their heirs.

The first step is understanding your current position. Are you likely to pay inheritance, and if so, how much?”

To get started, we offer an initial inheritance tax consultation. This looks at your overall situation and provides you with actionable steps to reduce your inheritance tax liability.

If you’re looking to reduce the amount of inheritance tax on your estate, speak to one of our expert advisors today.

>>> Book your initial consultation today <<<

Benefits of working with Frazer James

1. Expert financial planners

We are highly qualified professional advisers. Our team is made up of Certified Financial Planners, Chartered Wealth Managers, and Chartered Financial Advisors.

2. Award-winning

We have been recognised as being the best in class. In March 2021, we were awarded Financial Advisor of the Year for the South West. This was followed by being awarded Financial Advisor of the Year for the entire UK in May 2021.

3. Inheritance tax specialists

We specialise in inheritance tax planning and have particular expertise in estate and tax planning.

4. Fixed flat fees

We charge a fixed flat fee, meaning that you get to keep more of your hard-earned wealth. There are no hidden fees and you will never receive an unexpected invoice.

5. Independent financial advice

As independent financial advisers, we provide impartial financial advice on all aspects of your finances. We are independently owned and operate independently of any bias or conflict.

6. Fiduciary financial planners

As fiduciary financial planners, we have your best interests at heart. So you’ll be able to make big financial decisions with confidence.

What our clients say

“We received an inheritance and wanted advice on what to do with it. We were concerned about the tax implications and wanted to avoid making a decision that we might later regret.

Before providing any advice, they took the time to get to know us and what we wanted to achieve. They provided us with trustworthy advice and gave us the time and space to think independently.

Their advice was really valuable – definitely not something that we are going to regret. We now have a plan for using the inheritance that we’re really happy with.

I would definitely recommend Frazer James to others.”

B.W. – Essex

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Common Questions

What is inheritance tax?

How much is inheritance tax?

How can I avoid inheritance tax?

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What is the 7 year rule in inheritance tax?

Free Inheritance Tax Guide

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