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Inheritance Tax

Whether you are planning for the future, managing a high-value estate, or administering a will, our tax consultants provide clear, confidential, and customised support every step of the way.

Inheritance Tax (IHT) is a tax levied in the United Kingdom on the value of a person’s estate upon their death, or on certain gifts made during their lifetime. It is generally charged at a standard rate of 40% on the portion of an estate that exceeds the tax-free threshold — known as the nil-rate band — which currently stands at £325,000 per individual as of the 2024–25 tax year. An additional allowance, the residence nil-rate band (RNRB), may apply when a main residence is passed to direct descendants, potentially increasing the total tax-free amount to £500,000. Transfers between spouses or civil partners are typically exempt from IHT, and any unused portion of a deceased partner’s allowance can be transferred to the surviving partner.

IHT may also apply to gifts made during a person’s lifetime if the donor dies within seven years of making the gift, subject to taper relief. Certain gifts, such as those made from surplus income or to qualifying charities, are exempt. Trusts, offshore assets, and joint ownership arrangements can further complicate the IHT position, as can issues related to domicile and residency status. Valuation of estates, determining the correct allowances and exemptions, and ensuring timely submission of inheritance tax forms (e.g., IHT400) are key elements of the process. Executors are responsible for paying IHT before probate is granted, often using a combination of estate funds and instalment options offered by HMRC. A solid understanding of how IHT is calculated and how lifetime planning can reduce or eliminate liability is essential for individuals seeking to protect their family’s wealth across generations.

Who Needs Inheritance Tax Planning?

• Estates over the £325,000 threshold

• Individuals with multiple properties

• Planning for spousal transfers

• Using combined nil-rate bands

• Main home passing to children or grandchildren

• Estates with rising property values

• Planning for Business Property Relief

• Protecting family businesses from IHT

• Owning UK assets or global estates

• Domicile review and planning

• Discretionary, bare, and interest-in-possession trusts

• Reviewing 10-year and exit charges

• Handling tax on estates

• Ensuring accurate IHT reporting

• Planning tax-efficient charitable gifts

• Reducing IHT rate to 36% through legacy giving

Why choose us for Inheritance Tax Planning?

Inheritance Tax can erode your family’s wealth if not planned carefully. With McRock Berkeley, you get strategic guidance, proactive planning, and long-term protection — all delivered with clarity and care.

We build personalised inheritance tax plans based on your assets, family structure, and legacy goals — no templates, no guesswork.

We assess the value of your estate and provide a detailed overview of your IHT position, identifying opportunities to reduce your liability.

We ensure your assets are passed tax-efficiently to your spouse, children, and grandchildren — using all available reliefs and allowances.

Rising property values mean more estates are taxed. We help protect your home using the Residence Nil-Rate Band and smart structuring.

We guide you on how and when to make tax-free gifts — including the use of annual exemptions and 7-year rules — without compromising your lifestyle.

Trusts can protect wealth across generations. We advise on the right type, handle setup, and manage compliance with HMRC rules.

Own a business or farmland? We apply for up to 100% relief to ensure these assets pass on free from IHT where possible.

If you have international assets, we coordinate cross-border planning, assess your domicile status, and advise on worldwide estate exposure.

We help you reduce your IHT bill through tax-efficient legacy giving, including the 36% reduced IHT rate on qualifying donations.

We work alongside your solicitor or help you arrange wills and trusts that align with your tax plan, ensuring your wishes are fully respected.

We assist executors with IHT filing, valuations, and tax payments — and support trustees managing long-term family wealth.

Your privacy is paramount. We handle all estate matters with the utmost discretion, professionalism, and care.

We offer clear, transparent pricing for all inheritance tax planning services — no hourly surprises or hidden fees.

Tax laws change. So do your assets. We offer periodic reviews to keep your IHT plan current and effective.

Inheritance Tax is a UK tax on the estate (property, money, and possessions) of someone who has passed away. In 2025, the standard rate is 40% on estates worth over £325,000 — and with property prices on the rise, more families are falling within this threshold each year.

Without proper planning, a significant portion of your estate could go to HMRC instead of your heirs.

Inheritance Tax can apply if:

You own a home or other property in the UK

You have cash savings, investments, or business interests

You are planning to leave assets to children, grandchildren, or other heirs

You are a non-UK resident with UK-based assets

You are concerned about passing on wealth tax-efficiently

If you’re unsure whether your estate may be liable, McRock Berkeley can assess your position and offer tailored planning strategies.

How We Can Help

At McRock Berkeley, our consultants work closely with individuals, families, entrepreneurs, and legal professionals to deliver effective Inheritance Tax planning solutions. Our services include:

Estate & IHT Assessment

We provide a detailed overview of your estate and potential Inheritance Tax exposure based on current HMRC rules.

Lifetime Gifting Strategies

We guide you on how and when to gift assets during your lifetime to reduce the value of your taxable estate.

Use of Nil-Rate Bands & Reliefs

We help you utilise the standard Nil-Rate Band (£325,000) and the Residence Nil-Rate Band (£175,000) to protect your home and assets.

Trust & Asset Structuring

We set up trusts and assist in restructuring your estate to ensure efficient succession and potential tax savings.

Business & Agricultural Relief Planning

If you own a business or agricultural property, we structure your assets to maximise the up to 100% IHT relief available under current law.

Coordination with Legal Wills & Probate

We work alongside your solicitors or introduce trusted partners to ensure your will and estate plan are fully aligned.

Non-Resident & International Estate Planning

For clients with cross-border interests, we provide global tax coordination and assist with UK and non-UK domiciled estate strategies.

Inheritance Tax planning is best done early and with professional guidance. At McRock Berkeley, we make the process clear, compliant, and tax-efficient — so you can focus on what matters: your family, your legacy, and your peace of mind.

 Speak to one of our IHT specialists today
  Send us your enquiry
  Book a confidential consultation

McRock Berkeley – Strategic Tax Advisory. Trusted Legacy Planning.

FAQs

Who is liable to pay Inheritance Tax (IHT)?

Inheritance Tax is typically paid by the estate of the deceased before assets are distributed. However, beneficiaries may be liable in certain gift and trust scenarios.

What is the current Inheritance Tax threshold?

As of 2025, the Nil-Rate Band (NRB) is £325,000 per person. Anything above this may be taxed at 40%, subject to available reliefs.

What is the Residence Nil-Rate Band (RNRB)?

This is an additional £175,000 allowance when you leave your main home to direct descendants (children or grandchildren), potentially raising the tax-free threshold to £500,000 per person.

Can spouses or civil partners inherit tax-free?

Yes. Transfers between spouses and civil partners are 100% exempt from IHT, and any unused NRB or RNRB can be passed on to the surviving spouse.

How are lifetime gifts taxed?

Gifts made within seven years before death may be subject to IHT on a sliding scale. Gifts made over 7 years before death are usually tax-free.

What exemptions apply to gifts?

You can give away up to £3,000 annually (plus carry over one previous unused year), make small gifts of £250, and give wedding gifts up to £5,000 depending on your relationship.

What is Business Property Relief?

Up to 100% IHT relief is available on qualifying business assets, including shares in unlisted trading companies and certain business partnerships.

Is agricultural property exempt from IHT?

Yes — Agricultural Relief of up to 100% may apply to farms and related property, depending on usage and occupation rules.

Can trusts reduce Inheritance Tax?

Trusts can be effective tools for IHT planning, but rules vary by trust type. We advise on setting up and maintaining compliant trusts to manage wealth and reduce liability.

What is a “gift with reservation of benefit”?

If you give away an asset but continue to benefit from it (e.g., gifting a home but still living in it rent-free), HMRC may include it in your estate for IHT purposes.

How does McRock Berkeley help with Inheritance Tax planning?

We assess your full estate, apply all available exemptions and reliefs, and build a bespoke strategy for tax-efficient wealth transfer to your beneficiaries.

What happens if no planning is done?

Your heirs may lose up to 40% of your estate’s value to HMRC. Without planning, it’s also harder to protect business assets or property intended for future generations.

How are foreign assets treated for IHT?

If you’re UK-domiciled, your worldwide assets are subject to IHT. Non-domiciled individuals may only pay IHT on UK-based assets — though rules vary over time.

What’s the deadline for paying Inheritance Tax?

IHT must be paid within 6 months of the person’s death. Delays can result in interest and penalties. McRock Berkeley helps with valuations, filings, and payment planning.

Can I use life insurance to cover IHT?

Yes — whole-of-life policies written in trust can be used to pay IHT without increasing the estate’s taxable value.