A straightforward way to keep more of your estate by reducing inheritance tax for the family without eye-watering paperwork or “only-for-the-rich” price-tags.
The record-breaking tax bill every family should notice
HMRC collected an all-time high of £8.2 billion in Inheritance Tax (IHT) during the 2024/25 tax year, a jump of £700 million on the year before.
Why the surge?
- UK property values have climbed faster than wages, quietly pushing thousands of “middle-England” families into the 40% IHT net.
- The main nil-rate band has been stuck at £325,000 since 2009 and is now frozen until April 2028.
- The residence nil-rate band adds £175,000 but tapers away once an estate tops £2 million.
Every £1 you move outside your estate today can save your heirs 40 pence tomorrow.
Speak to a qualified adviser today and see how much IHT you could save.
1. Myth-buster: “Trusts are only for the wealthy”
Nearly half of people surveyed believe estate planning is “mainly for the ultra rich” and that their assets are “too small to bother”. Yet trusts are used daily by perfectly ordinary families:
“While trusts are common in high-net-worth planning, they’re far more practical and affordable than many people realise.”
Typical household examples include:
- Shielding the family home from IHT on second-death.
- Drip-feeding money to young adults until they’re ready.
- Protecting a vulnerable child’s benefits.
- Ring-fencing savings from a future divorce.
If you own a property, have life cover, or hold investments, a trust can be just as relevant to you as to millionaire families.
2. How a discretionary trust lowers inheritance tax without losing control
| Benefit | Why an adviser adds value |
|---|---|
| Removes future growth from your estate | Advisers structure the trust so “gift with reservation” rules don’t drag the asset back into your taxable estate. |
| Uses the 7-year rule to shelter £325 k per person | A planner times transfers and files the HMRC forms correctly, avoiding the 20% lifetime charge on excess gifts. |
| Lets you remain a trustee | A specialist drafts powers so you stay involved while keeping the tax advantages. |
| Protects vulnerable beneficiaries | Professional drafting allows staggered or conditional pay-outs tailored to family needs. |
Here you can find more tricks that will help you save money with estate planning.
3. Three-step trust plan you can start this month to lower inheritance tax
- Ring-fence assets you won’t need for everyday spending often surplus cash, equities or part of a buy-to-let.
- Work with a qualified solicitor or financial adviser to draft the discretionary trust deed (typically £1-2 k, about two weeks).
- Transfer up to £325 k each (£650 k for a couple) into the trust now. Repeat in year 8 to double the shelter.
Get personalised advice from a certified expert today.
4. Case study: How the Grants shaved £130,000 off their future inheritance tax
| Before trust | After trust | |
|---|---|---|
| Estate value | £1.2 m | £1.2 m |
| Nil-rate bands (couple) | £650 k | £650 k |
| Assets moved into trust | – | £325 k |
| Taxable estate | £550 k | £225 k |
| IHT at 40% | £220 k | £90 k |
| Family saving | – | £130 k |
(Assumes both spouses survive seven years after the gift, figures rounded.)
5. Why professional advice matters more than ever
| DIY risk | Adviser advantage |
|---|---|
| Mis-timed gifts can trigger a 20% lifetime charge. | Advisers calculate the Chargeable Lifetime Transfer position and handle the paperwork. |
| Trust Registration Service deadlines can be missed. | Your adviser registers and maintains the trust, avoiding penalties. |
| Poor wording may give beneficiaries access too early, or never. | A specialist drafts flexible clauses that adapt to marriage, divorce or disability. |
| Tax rules change (possible IHT reform). | Ongoing reviews keep your plan compliant and on-track. |
Working with a regulated adviser often means FCA oversight, professional indemnity cover and bespoke guidance – not generic templates.
Arrange a no-obligation chat with a UK regulated trust specialist now.
6. Your next steps
- Estimate your IHT exposure with our two minute online checker.
- Book a no-obligation chat with a qualified adviser to map out trust options.
- Implement the trust – your adviser drafts, registers and lodges all HMRC notifications.
Final thought
The longer your wealth remains in your estate, the harder it works for the taxman. A professionally drafted discretionary trust can turn tomorrow’s 40% tax bill into a lasting family legacy, no millionaire status required.
Start your free trust strategy review with a regulated professional.
(Takes less than three minutes, no obligation.)
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.
