01: Introduction

There are many different IHT planning strategies. The following is a brief outline of some of them.

The first step in any IHT planning is for married couples or civil partners to make sure that they have up to date wills.

The transferability of the nil rate band introduced in October 2007 has made the drafting of wills less complex. For married couples or civil partners the imperative to ‘use or lose’ the nil rate band on first death has disappeared. If everything is left to the survivor – as if often the case - then their nil rate band will effectively be doubled.

A will that passes more than the available nil rate band away from the surviving spouse or civil partner on first death could mean any unnecessary inheritance tax charge is incurred. The same unfortunate situation may arise if there is no will – an all-too common situation. In the absence of a will the rules of intestacy apply. Contrary to popular belief, these do not mean that everything automatically passes to the survivor.

It is also a sound idea to build a retirement fund so that if you are contemplating making a series of gifts to save IHT, you can do so with confidence that you will have enough income to live on. All these strategies involve investments whose value can go down as well as up. They also have costs that mean you should regard them as arrangements for the longer term.Last Updated