Six things to take away
- Receipts are rising, reliefs are shrinking, so early planning matters. You don't need to be the IHT expert; you just need to spot it. Without the right legal structure in place, inheritance tax at 40% and professional fees on a disputed estate can eat into what your client has built.
- More of your clients are in the net. Receipts are heading past £9bn. Business and agricultural relief is now capped at £2.5m per person, and pensions come into the estate from April 2027. The residence nil rate band tapers away for an estate worth more than £2m, even where the home is left to direct descendants: it reduces by £1 for every £2 over the £2m threshold, so it is gone entirely at £2.35m for a single person and at about £2.7m for a married couple.
- Spot it with one question. Clients with a trading business, a property portfolio or a large pension who think they're fine. Ask: has anyone looked at your inheritance tax position?
- Start with the tax planning, then put the legal structure around it. The planning sets out what the client wants to achieve and the cleanest way to get there; the will, trust deeds and letter of wishes are then drafted to deliver it. Every estate needs a will, whatever its size: without one, nobody controls who administers the estate or how the client's intentions are read, and the legal fees in a dispute can dwarf the tax. The letter of wishes does the fine-tuning. As Simon put it, the will picks the squad and the letter picks the team.
- A discretionary trust works across four taxes. In the example covered: assets leave the estate at today's value, the gain is held over, there is no stamp duty, and income goes to family members with unused allowances. That saved the family around £260,000 in inheritance tax, plus income tax savings year on year by using the grandchildren's available personal allowances.
- You keep the client. We collaborate with lawyers, wealth managers and accountants, and we lead and project manage the tax planning. The legal work and the products are brought in as needed, and you stay in the room.
How it works in practice. You bring the client. Shoaib leads the tax planning and project manages the whole thing: he sets out the options, brings in the lawyers for the wills and trust documents and the wealth manager for any products, and keeps every part moving to a plan. You keep the relationship and the ongoing work, and the client gets one joined-up plan with one person running it.