Inheritance Tax & Estate Planning

Make the most of what you leave behind

You’ve worked hard for what you have, and it’s natural to want as much as possible to benefit the people you care about. Perhaps your home has increased in value, you’re thinking about helping your children financially, or you’re concerned that your family could face a substantial Inheritance Tax bill when you die. You may simply want to understand what the rules mean for you and whether there’s anything you should be doing now.

At The Jonathan Lea Network, we’ll take the time to understand your circumstances, explain your options clearly and help you make informed decisions about your estate.

Good estate planning isn’t just about reducing tax. It’s about making sure your wishes are respected, the people you care about are provided for and your arrangements work for you and your family.

Our Inheritance Tax and estate planning solicitors in Haywards Heath, Sussex, provide practical advice tailored to your circumstances, without unnecessary jargon or complicated arrangements where they aren’t needed.

What is Inheritance Tax, and will my family have to pay it?

Inheritance Tax (IHT) is a tax that may be payable on someone’s estate when they die. Your estate can include your home, savings, investments, possessions and business interests, together with certain other assets and gifts taken into account under the tax rules.

The standard Inheritance Tax rate is 40%, but this doesn’t mean 40% of everything you own will automatically be taxed.

There are tax-free allowances, exemptions and reliefs that may reduce or eliminate the amount payable. Inheritance Tax is normally paid from the estate by the executors or administrators before the remaining assets are distributed to beneficiaries. Tax can also arise in certain circumstances during someone’s lifetime, particularly in connection with trusts and some gifts.

How much can I leave before Inheritance Tax is payable?

Everyone has a standard Inheritance Tax allowance, known as the nil-rate band, currently £325,000. 

This means that, broadly speaking, the first £325,000 of an estate can pass without Inheritance Tax, assuming the allowance is available and hasn’t been used by relevant lifetime transfers. Inheritance Tax is generally charged at 40% on the taxable value above the available allowances, after taking account of applicable exemptions and reliefs.

Can I leave more to my children without paying Inheritance Tax?

Potentially, yes.

An additional allowance, known as the residence nil-rate band, may be available when you leave a qualifying home to your children, grandchildren or other qualifying direct descendants. This allowance is currently up to £175,000 per person. Together with the standard nil-rate band, it can allow a qualifying individual to pass on up to £500,000 without Inheritance Tax. However, the additional allowance is subject to conditions. It can be restricted by the value of the qualifying property and begins to reduce where the estate is worth more than £2 million.

What if I’m married or in a civil partnership?

Transfers to a spouse or civil partner are generally exempt from Inheritance Tax, although additional rules can apply in some cross-border situations. It may also be possible to transfer unused Inheritance Tax allowances from the first spouse or civil partner to die to the estate of the survivor. This means that, in qualifying circumstances, a married couple or civil partners may be able to pass on up to £1 million without Inheritance Tax on the second death. The amount available depends on the estate, the beneficiaries and how the relevant allowances are used. 

We’ll help you understand which allowances may apply rather than assuming everyone qualifies for the maximum.

What exemptions and reliefs could reduce my Inheritance Tax bill?

There are several ways in which the inheritance tax rules recognise different personal and financial circumstances.

Some of the main exemptions and reliefs include:

Gifts to a spouse or civil partner: Assets left to a spouse or civil partner are generally exempt from Inheritance Tax, subject to any applicable restrictions.

Gifts to charity: Gifts left to qualifying charities are generally exempt from Inheritance Tax. If at least 10% of the relevant net estate is left to charity, a reduced Inheritance Tax rate of 36% may apply to the taxable part of the estate.

Business and agricultural property: Certain business interests and agricultural assets can qualify for Business Property Relief or Agricultural Property Relief. These reliefs can significantly reduce the Inheritance Tax payable on qualifying assets, although eligibility conditions and limits apply.

Gifts during your lifetime: You may be able to reduce the value of your taxable estate by making gifts during your lifetime. However, different exemptions and rules apply depending on the amount given, who receives the gift and whether you continue to benefit from the assets.

Estate planning can help you understand which exemptions and reliefs are relevant to you and how they might work together.

Can I give money to my children or grandchildren without paying Inheritance Tax?

Many people would prefer to help their family while they’re still alive rather than leave everything through their will. You may want to contribute towards a house deposit, help with education costs or give your children or grandchildren some financial security. Lifetime gifts can form part of your estate planning, but it’s important to understand the rules before making substantial transfers.

The £3,000 annual gifting exemption: You can generally give away up to £3,000 in total each tax year without those gifts being added to the value of your estate for Inheritance Tax purposes. If you don’t use the full exemption, you can carry the unused amount forward for one tax year only. This means that, in qualifying circumstances, you could give away up to £6,000 in one tax year using the current year’s exemption and unused exemption from the previous year.

Small gifts of up to £250: You can give up to £250 in total to each of any number of people in a tax year under the small-gifts exemption, provided you have not used another gifting exemption for the same person. If your gifts to someone exceed £250 in that tax year, this exemption does not apply to any of those gifts, although another exemption may be available.

Regular gifts from income: If you have surplus income, certain regular gifts may qualify for an exemption from Inheritance Tax. For example, you might make regular payments to help a child with living expenses or contribute towards a grandchild’s savings. To qualify, the gifts must meet specific conditions, including being made as part of your normal expenditure, coming from income and leaving you with sufficient income to maintain your usual standard of living.

The seven-year rule: Some gifts made to individuals become exempt from Inheritance Tax if you survive for seven years after making them. However, if you die within seven years, the gift may need to be taken into account when calculating the tax position. There are also different rules for certain gifts into trusts and gifts where you continue to benefit from the asset. For example, giving your home to your children but continuing to live in it rent-free would not ordinarily remove its value from your estate for Inheritance Tax purposes.

Before making substantial gifts, it’s worth considering your own future needs as well as the tax implications. You may need access to savings or assets later in life, and some gifts may also create Capital Gains Tax or other consequences.

How can trusts help with estate planning?

Trusts can be useful where you want to provide for someone while retaining a structure for how assets are managed or distributed.

For example, you may want to:

• Provide for a surviving spouse while preserving an inheritance for children from an earlier relationship.
• Make financial arrangements for younger or vulnerable beneficiaries.
• Allow trustees to manage assets for a family’s longer-term needs.
• Plan how particular property or business interests should be held.

Different types of trusts have different legal and tax consequences.

Importantly, putting assets into a trust does not automatically remove them from your estate for Inheritance Tax purposes. Some trusts can also trigger tax charges when assets are transferred into them, during their operation or when assets leave the trust.

We’ll explain the options, potential benefits and disadvantages before recommending any particular arrangement.

You can find out more about our Trusts services.

What if I own a business?

If you’ve built a business, you may want to make sure it can continue operating and that your family is provided for if something happens to you. Estate planning for business owners can involve questions about ownership, succession, shareholder arrangements and Inheritance Tax. Certain qualifying business assets may benefit from Business Property Relief, although the rules are detailed and the relief is not available for every type of business or investment.

Changes introduced from 6 April 2026 also affect the amount of qualifying business and agricultural property that can receive 100% relief.

We can help you consider how your business interests fit into your wider estate plan and, where appropriate, draw on JLN’s corporate and commercial legal expertise.

What about my pension?

Pensions can form a significant part of someone’s wealth, so it’s important to consider them alongside other assets when planning an estate. From 6 April 2027, most unused pension funds and pension death benefits will be brought within the scope of Inheritance Tax, subject to relevant exemptions and exclusions. This may affect people who previously expected unused pension savings to pass to beneficiaries outside their estate for Inheritance Tax purposes. The changes do not mean every pension benefit will automatically become taxable.

If you have substantial pension savings, it may be sensible to review your estate planning before the new rules take effect, with input from your financial adviser where appropriate.

How can The Jonathan Lea Network help with Inheritance Tax planning?

You don’t need to understand every allowance or exemption before seeking advice.

We’ll start by listening to your circumstances and what you’re hoping to achieve.

Depending on your needs, we can help you:

• Review your existing will and estate planning arrangements.
• Understand your potential Inheritance Tax exposure.
• Consider the allowances, exemptions and reliefs that may apply.
• Explore the implications of lifetime gifts.
• Consider whether trusts might be appropriate.
• Review arrangements involving property and business interests.
• Prepare or update wills and relevant trust documentation.
• Reconsider your estate plan when your family circumstances, finances or the law change.

We’ll explain the available choices, including any disadvantages or additional costs, so you can make decisions with confidence.

Where your circumstances require specialist financial or tax advice beyond our legal services, we can explain where additional professional input may be appropriate.

What happens when you contact us?

1. We listen to what matters to you: We’ll discuss your family circumstances, your assets and the people you want to provide for. You may have a specific concern about Inheritance Tax or simply want to understand whether your existing arrangements are appropriate.

2. We review your position: We’ll consider the information relevant to your estate and identify the legal and tax issues that need attention.

3. We explain your options: We’ll talk you through any relevant planning opportunities, the likely implications and the practical steps involved.

4. We agree the work and fees: We’ll explain the proposed legal work, the likely fees and any anticipated additional costs before you decide whether to proceed.

5. We help you put arrangements in place: Where appropriate, we’ll prepare the necessary documentation and explain any steps you or your other professional advisers need to take. We can also help you review your arrangements as your circumstances change.

Let’s make a plan that works for you and your family

Inheritance Tax planning can seem complicated, but you don’t need to work through it alone. Whether you’re concerned about the potential tax on your family home, thinking about helping your children financially or reviewing more substantial assets, we’re here to explain your options and help you make informed decisions.

We’ll take the time to understand what matters to you and recommend an approach that reflects your wishes and circumstances.

Contact our Inheritance Tax & Estate Planning team.

Tell us a little about your situation and what you’d like to achieve. We’ll explain how we may be able to help, what the next steps involve and the likely costs. Email wewillhelp@jonathanlea.net or fill out our form on this page and we’ll get back to you. 

This page provides general information about Inheritance Tax and estate planning in England and Wales. Tax treatment depends on individual circumstances and the rules in force at the relevant time. Professional advice should be obtained before implementing estate-planning arrangements.