With rising property values outpacing inheritance tax thresholds, more families are finding themselves facing potential tax liabilities that previous generations may not have encountered. A tailored estate plan can provide clarity and meaningful savings for future generations.
We recently advised clients who, in later life, owned their family home and had also inherited both of their respective parents’ properties. These additional properties were providing useful income to supplement their pensions, but as they began planning for the future, they became increasingly concerned about the inheritance tax burden they might leave behind.
Following an initial consultation, we encouraged the couple to undertake a detailed assessment of their income needs. This exercise helped them determine whether they truly needed to retain all three properties. As part of the process, they also engaged in open discussions with their children to understand their expectations and future plans.
With this broader perspective, our clients decided to transfer one of the properties to their children, who intend to maintain it as a family holiday home. We then worked with the clients to update their Wills, ensuring these lifetime gifts were properly recorded and balanced within the broader estate plan.
By taking early, considered action, and focusing first on their own needs, the clients were able to begin mitigating their inheritance tax exposure. Assuming they survive the gift by seven years, the family stands to save tens of thousands of pounds in tax – maximising inter-generational wealth while supporting their children in the present.
This case reflects how thoughtful planning, combined with professional advice, can turn complex estate issues into clear, practical solutions.
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