Call us01689 822554

Inheritance Tax

Inheritance Tax is a tax charged by the Government on the value of a person’s estate at their death. The estate will include your home and contents, car, jewellery, savings and investments. Inheritance Tax is charged at the rate of 40%.

Important News on Inheritance Tax

From April 2017 the Inheritance Tax (IHT) rules changed with the introduction of a Residential Nil-Rate band.

Please click here for full details.

Do most people have to pay Inheritance Tax?

The first £325,000 of a person’s estate (known as the “nil rate band”) is not charged to Inheritance Tax. If an estate is worth less than £325,000, no Inheritance Tax is payable.

The sum of £325,000 (or £650,000 combined) may be increased to £500,000 (or £1,000,000 combined) under certain circumstances using the new Residential Nil-Rate Band.

Please click this link for further details.

If I leave my whole estate to my husband/wife, will Inheritance Tax be payable?

A gift between spouses or civil partners is exempt from Inheritance Tax. If the estate of a married couple/civil partners exceeds £650,000 tax will usually only be paid on the excess provided the necessary claims are made to HMRC within the appropriate time limits.

Please click here for details of the new Residential Nil-Rate Band.

Residential Nil-Rate Band

If you are a property owner and are planning to leave your home to your children, your estate may benefit from an additional tax-free amount under the Residential Nil-Rate Band which came into effect on 1st April 2017.

Not every estate will qualify for this, but it is likely to be a significant benefit to those which do.

Protecting your children’s inheritance

Family structures nowadays can be quite complex and issues may arise when both parties in a second marriage have children from previous relationships. What is the best way for them to look after each other and also to ensure that their own children ultimately benefit?

Please click here for information on how you may protecting your children’s inheritance.

Have you minimised your inheritance tax liability?

If you have assets of over £325,000 then your family and other beneficiaries may be faced with a bill for inheritance tax (IHT) subject to the new Residential Nil-Rate band.
There are a number of steps that you can take to protect your estate and minimise the amount of inheritance that will have to be paid. Having a professionally drafted Will is one such step that you should consider.
IHT is charged on the value of estates left when people die. Currently, the first £325,000 of value is allowed to pass to
beneficiaries free of tax, with IHT being charged at 40 per cent on anything over that amount.

The use of Trusts to reduce IHT liabilities

Please click here for an article on the use of Trusts.

Can I gift assets during my lifetime to reduce the size of my estate on my death?

You can make a gift during your lifetime; however if you die within 7 years of making the gift, its value is added to the value of your estate on death. You will also need to consider whether there is a potential Capital Gains Tax liability when deciding whether to make a gift.

Are there any exemptions to the “Seven year rule”?

Yes, there are a number of exemptions. You can gift up to £3,000 each year (known as the annual exemption). You can make gifts of up to £250 to different individuals. If your child gets married you can make a gift of £5,000. There are other exemptions which may be relevant to your individual circumstances.

The above is an outline of how Inheritance Tax works. If you are concerned about Inheritance Tax we strongly advise that you obtain tax planning advice that is tailored to your personal and financial circumstances.

The benefits of marriage

Please click here for a light hearted but very practical look at the tax benefits of marriage

Wealthier couples

If you plan to take advantage of the new residential Nil-Rate Band, then it is important to ensure that you do not fall foul of the tapering law.

However, if the estate of the person leaving the property to the children is over £2m, then this new RNRB is tapered away, at a rate of £1 lost for each £2 left over £2m. This can be addressed by careful tax planning, but testators who do not take advice may leave their beneficiaries with an unnecessarily large tax bill.

Do you have business or agricultural assets?

Assets such as farmland, AIM listed trading stocks and shares in a family business can attract IHT reliefs of up to 100 per cent.  If these assets are put into a trust structure within your will this allows you to crystallize the tax relief at the earliest opportunity.  This is very important if there is a chance that the asset may be sold by your surviving spouse and turned into cash before their death as the relief would then be lost.

Do you have property assets with development potential?

Land with development potential can create a problem for surviving family.  The real value only kicks in once planning permissions are granted, and what if this occurs after you die and the asset has passed to your spouse?  Suddenly they may have an estate worth well in excess of the IHT threshold.  Placing the land in a trust through your will ensures that any increase in value is contained within the trust rather than within the estate of your spouse.

Do you wish to support a charity?

Since 6 April 2012 a reduced IHT rate of 36 per cent applies if more than 10 per cent of an estate is left to charity.

Gifts to charities have always been free of IHT, and they can therefore be utilised as part of your overall tax planning structure, as well as being a way to support causes that are important to you.  If you do not have family to remember in your will, or if you have made ample provision for them during your lifetime, then you could consider leaving a sum equal to the nil rate band to non-charitable beneficiaries (currently £325,000 or £650,000 if you were widowed), with the residue left to charities.  Your estate will pass tax free, and you will be helping a good cause too.

Inheritance Tax for the Chinese Community

We were delighted to be invited to give a talk on Wills, Lasting Power  of Attorney and Inheritance Tax to members of The China Club, which is a meeting place for Chinese nationals living in the area,

The talk was jointly presented by Catherine Crabtree, of Thomas Dunton, and translated into Chinese by Mrs Kit Leung.

Please click here for a full transcript of the talk plus videos, in both English and Chinese.

For further advice

There are many other opportunities to reduce your IHT liability by planning during your lifetime but of course, any inheritance tax planning is dependent upon your circumstances.  The important point is that if you do not take advice from specialist advisors then you may miss out on opportunities to save your estate money, and to ensure that your beneficiaries inherit as much from you as they can.

For further information on Inheritance Tax and other relevant issues please contact Melanie Dunton or Rae Broughton on 01689 822554 or email

Wills, Probate & Powers of Attorney

Enquiry now

  1. required
  2. required
  3. required
  4. required
  5. Please confirm you have read and understood the Terms of Use and Privacy Policy.

What our clients say about us:

  • “We have both been impressed with your diligent and thorough conveyancing, highlighting issues with the property that had been missed during the previous sale”.

  • “Catherine Westcott truly helped us beyond her duty and was always there for us, going that extra mile made all the difference”.

  • “All very satisfactory, efficient and approachable. We now look upon Thomas Dunton as our solicitors”.

  • “Extremely satisfied with the service that you have provided. We will be recommending Thomas Dunton to our family and friends”. 

  • “Great patience and great deal of thought to ensure our Will achieved our complicated requirements. Thank you”.

  • “I found the staff I dealt with professional, practical and patient…helping to clarify matters and enabling me to take better informed decisions”.

  • “Wonderful and understanding of my circumstances. Guided me through the process and presented all the options in a way that I could understand”.

  • “Thank you for all your hard work. You have been amazing. I will forever be thankful that you were my solicitor”.

  • “The service was exceptional —  friendly, welcoming and sympathetic. I do not think that I could have received a better service anywhere else“.

  • “No words to express my gratitude to your amazing work and patience”.

  • “Thank you very much for the courtesy, care and efficiency which we have received from you and everyone we have dealt with at Thomas Dunton”. 

  • “Thank you so much for all your help for my family and I.  I am so very  grateful.  You’re  my little Christmas angels”

  • “What you all do for people is amazing. You should all be proud of yourselves for putting a little bit of light back in my life and I’m most certain that of others”

  • “The firm give their clients very detailed and clear advice in plain English.”

  • “Extremely friendly, did not feel that anything was too much trouble”.

  • “I received a very prompt, professional and caring service from you at a very sad and distressing time”.


  • “Thank you all for your amazing support throughout last year.  You really are a fabulous team”.


  • “It really was a hideous experience, but every time I got to the point I couldn’t breathe and I spoke to one of you, I felt instantly strong again”.

  •  “You made me giggle and reassured me whenever I was about to cry or hide in a cupboard, often picking up the phone to check I was ok – so very kind”.


  • “Vernon Hadida is by far the best solicitor I have ever dealt with.”

  • “Extremely satisfied with the service which I considered excellent value for money.”

  • “I was very happy with the service. I was always able to speak to somebody that could help me when I telephoned.”

  • “Thank you for all your work on my claim. I am extremely grateful for your assistance.”

  • “Thomas Dunton exceeded my expectations in terms of both service quality and value for money.”