Did you know that there are ways of making sure that your family inherits more with estate planning that millions of people don’t know about. Inheritance tax is a hot topic! Small, smart actions taken now can prevent your loved ones from losing tens or even hundreds of thousands in unnecessary taxes, fees, and delays.
Here’s the truth: these three tricks aren’t complicated, but most families still miss them.
Estate Planning Trick #1: Use “Gifts from Surplus Income”
Why people miss it
Everyone knows the £3,000 annual gift allowance. But far fewer know you can make unlimited gifts from surplus income if done right.
How it works
If your income exceeds your spending needs, you can gift the difference tax-free with no seven-year clock, as long as it doesn’t reduce your standard of living.
Real world example
Margaret, a retired nurse, earned £60k a year but only spent £40k. She gifted £16k annually to her sons, documented it, and kept it out of her estate. That saved them £64,000 in inheritance tax.
Estate Planning Trick #2: Write Life Insurance Into Trust
Why people miss it
Most assume life insurance is always tax-free. But if it’s not held in trust, the payout can be added to your estate and taxed at 40%.
How it works
A one-time form places your policy outside your estate, meaning 100% of the payout goes to your family, not the taxman.
Real world example
Kevin had a £250,000 policy on top of owning his £450,000 house. Without a trust, his estate would’ve owed £100,000. With the trust in place, his kids got the full sum.
Is your will set up to protect your family? Book a free call with a regulated adviser →
Estate Planning Trick #3: Add a Discretionary Trust to Your Will
Why people miss it
Wills often seem like a tick-box task. But without the right structure, they can lead to unnecessary tax, delays, and even family conflict.
How it works
A discretionary trust in your will lets your trustees manage who gets what and when, ideal for protecting young or vulnerable beneficiaries and insulating assets from future claims.
Real world example
Angela added a discretionary trust to her will, allowing her trustees to support her grandchildren through university, while keeping the funds safe from their parents’ divorces.
Here you can find more information how to reduce your inheritance tax with a trust.
Take the first step to protect your estate. Speak with a regulated adviser today →
Small Moves, Big Savings
By using:
- Gifts from surplus income
- Life insurance trusts
- Discretionary will trusts
You could protect £100,000+ for your family without expensive solicitors fees or years of planning. It’s legal, compliant, and fairer to your family to make these small adjustments.
Take control of your legacy today.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always do your own research and consult with a regulated financial advisor before making important financial decisions.
Stephen Dale heads the Editorial Team at The Finance Review.
We turn complex UK tax, pension and property rules into plain English so you can make informed choices.
Our articles are educational only and should not be taken as personal advice.
If you need tailored guidance, we can introduce you at your request to FCA authorised advisers, solicitors or chartered accountants who specialise in your situation.
Important: Stephen is a professional content strategist, not a regulated financial adviser or solicitor.
