How to Reduce Inheritance Tax

First, check whether you'll pay any

Inheritance tax only applies above the nil-rate band, which is £325,000 per person for 2026/27. Most estates fall under it and pay nothing. Before worrying about planning, work out whether yours is actually likely to be taxed. Our guide to the nil-rate band explains how the thresholds stack up.

Leave it to your spouse

Anything you leave to a husband, wife or civil partner is completely free of inheritance tax, however large. When the second partner dies, any unused nil-rate band transfers across as well. Between them, a couple can usually pass on at least £650,000 before tax applies, and often more.

The residence nil-rate band

Leave your home to your children or grandchildren and you may get an extra allowance, currently up to £175,000 per person. Combined with the transferable nil-rate band, a couple leaving the family home to their children can often pass on up to £1 million tax-free.

Give money away while you're alive

Gifts you make more than seven years before you die normally drop out of your estate completely. On top of that you can give away £3,000 each year with no questions asked, make small gifts of up to £250 per person, and give regular amounts out of spare income. Each of these shrinks the estate that gets taxed.

Give to charity

Charitable gifts are tax-free. Leave 10% or more of your net estate to charity and the rate on everything else falls from 40% to 36%.

Where a will service stops

Choosing the right beneficiaries is part of the picture, and PureWill handles that. Active tax planning is not: trusts, lifetime gifting strategies and business relief are specialist work. If your estate faces a real tax bill, a solicitor or a chartered tax adviser will usually save your family far more than they charge.