Estate Planning and Inheritance Tax Solicitors

Estate planning is deciding, deliberately, what happens to what you have built — rather than leaving it to the intestacy rules, to HMRC's default position, or to whatever your family can agree on afterwards.

For some clients it is mainly about tax. For others it is about a second marriage, a vulnerable child, or a business. Usually it is a combination.

Inheritance tax — the basics

All figures below are marked for verification. Thresholds and reliefs change with Budgets, and this page must be checked before publication and reviewed annually.

Most estates pay no inheritance tax at all. But property values in Berkshire and south Buckinghamshire mean a good number of local families are closer to the threshold than they assume — often because they have not counted the house at current value.

Lifetime giving

The seven-year rule

Most gifts to individuals are potentially exempt transfers. Survive seven years and they fall out of your estate entirely. Die within seven years and they count back in, though taper relief reduces the tax on gifts made more than three years before death.

The practical implication is simple: time is the most valuable asset in inheritance tax planning. Planning at 65 has options that planning at 88 does not.

Exemptions you can use every year

• Annual exemption — per year, and any unused amount can be carried forward one year
• Small gifts — per person per year, to any number of people
• Wedding gifts —
• Gifts out of surplus income — potentially the most valuable and least used. Regular gifts from income, which do not reduce your standard of living, are immediately exempt with no seven-year wait and no upper limit. It requires proper record-keeping, and we will show you how.

What to be careful about

Gifts with reservation of benefit. Give away your house but continue living in it rent-free, and it remains in your estate. This catches people constantly.

Giving away too much. The commonest mistake we see is clients impoverishing themselves to save tax their family would happily have paid. Keep enough.

Capital gains tax. A gift can be a disposal for CGT purposes. Saving inheritance tax while triggering a CGT bill is not always a win — the two need considering together.

Trusts

A trust separates legal ownership from benefit. Trustees hold assets for beneficiaries under terms you set.

When a trust genuinely helps

Second marriages. A life interest trust lets your spouse live in the property for their lifetime, with the capital passing to your children afterwards. It solves the central problem of blended families: providing for a new partner without disinheriting your children.

Vulnerable beneficiaries. Where a beneficiary has a disability or cannot manage money, a trust provides for them without an outright transfer, and can preserve entitlement to means-tested benefits.

Young beneficiaries. Control the age at which children inherit outright, rather than the default of 18.

Protecting against divorce or bankruptcy. Assets in trust may be better protected than assets given outright.

Being straight about trusts

Trusts are sometimes sold as a universal inheritance tax solution. They are not.

Most lifetime trusts fall within the relevant property regime, which brings an entry charge above the nil rate band, ten-yearly charges, and exit charges. Most express trusts must be registered with HMRC's Trust Registration Service. Trustees have ongoing legal duties and there are annual compliance obligations.

Trusts are genuinely valuable for control and protection. They are frequently oversold for tax. If a trust is not right for you, we will say so.

Business and agricultural assets

Business Property Relief and Agricultural Property Relief can substantially reduce or eliminate inheritance tax on qualifying business and farming assets.

Qualification depends on the nature of the business, how long assets have been held, and how the business is structured. Businesses holding mainly investments generally do not qualify.

If you own a business, this is worth reviewing periodically rather than once. Reliefs change, and so do business structures.

Other things worth planning for

Care fees. Care costs are a bigger risk to most estates than inheritance tax. Schemes marketed as protecting the home from care fees are frequently ineffective and can amount to deliberate deprivation of assets, which a local authority can disregard. Be cautious of anyone selling this aggressively — we will give you a realistic view.

Jointly owned property. How you hold property matters. Joint tenants means the survivor takes automatically, regardless of your will. Tenants in common means your share passes under your will, which is what makes life interest trusts possible. Severing a joint tenancy is straightforward and is sometimes the single most useful step in a plan.

Assets abroad. Foreign property may be governed by local succession law, which can override an English will. You may need a will in each jurisdiction, carefully drafted so they do not revoke each other.

Digital assets and cryptocurrency. Increasingly significant, and easily lost entirely if nobody knows it exists or how to access it.

How we work

1. Fact-find. What you own, how it is held, who your family are, and what you want to achieve.

2. Analysis. Your current inheritance tax exposure, and where the real risks are — which is often not tax at all.

3. Options. Explained in plain English, with the drawbacks stated as clearly as the benefits.

4. Implementation. Wills, trusts, severance of joint tenancy, gifting programmes, LPAs.

5. Review. Circumstances and legislation both change. We recommend a review every three to five years, or after any major event.

We work alongside your accountant and financial adviser where you have them. We are solicitors, not financial advisers — we do not sell investment products, and we have no commission interest in what you decide.

Fees

Complex planning is quoted individually after the initial consultation.

Frequently asked questions

Can I give my house to my children to avoid inheritance tax? Rarely a good idea. If you continue living there rent-free it is a gift with reservation of benefit and remains in your estate. It also exposes the property to your children's divorces, bankruptcies and creditors, and can create a capital gains tax problem. There are usually better routes.

What is a deed of variation? It allows beneficiaries to redirect their inheritance within two years of death, and can be treated as though the deceased had made the gift. It is a genuinely useful tool for correcting an outdated will or improving the tax position after the event — but the two-year deadline is strict.

Should I set up a trust? Sometimes. Trusts are excellent for control and protection — second marriages, vulnerable beneficiaries, young children. They are less often the tax solution they are marketed as, because most lifetime trusts carry their own charges. We will give you a straight answer.

Can I protect my home from care fees? Be sceptical of anyone who promises this. Arrangements made largely to avoid care costs can be treated as deliberate deprivation of assets and disregarded by the local authority. There are legitimate steps in some circumstances, and we will explain what is realistic rather than what sounds appealing.

How often should I review my plan? Every three to five years, and after any significant event — marriage, divorce, death, birth, a business sale, a substantial inheritance, or a change in the tax rules.

Do you work with my accountant or financial adviser? Yes, and we prefer to. Estate planning works best when the legal, tax and financial advice are aligned.

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