RK INVESTING
For many UK families, property is their largest asset and the main reason their estate faces Inheritance Tax. With thresholds frozen and rules on pensions and relief evolving, early planning is essential to protect what you’ve built.
1. Reviewing Nil-Rate Bands and Property-Specific Reliefs
The residence nil-rate band and standard nil-rate band offer valuable relief, but complex tapering rules and lifetime limits can reduce their benefit. Checking your entitlement and understanding how future property disposals might affect these reliefs is a critical first step.
Tip: Run a projection of your estate value every few years, including potential growth, to see whether you’ll remain within available allowances.
2. Gifting, Trusts and the Seven-Year Rule
Strategic gifting and the use of trusts can remove property value from your estate over time, but the seven-year rule and potential gift reservations require careful handling. For larger portfolios, a mix of lifetime gifts and trust structures can significantly reduce future IHT.
Tip: Start gifting earlier than you think you need to; timing can make the difference between full relief and a sizeable IHT charge.
3. Business Property Relief and Commercial Elements
Where your portfolio includes commercial or mixed-use assets, Business Property Relief may offer substantial IHT benefits. Understanding the qualifying conditions and how far relief extends is key to structuring your holdings efficiently.
Tip: Consider whether redeveloping or repositioning some residential assets towards commercial use could enhance IHT relief without compromising your strategy.
Conclusion
Inheritance Tax is often left until it’s too late. By reviewing your estate regularly and layering different planning tools, you can retain more of your property wealth for the next generation.
RK Investing works with investors and their advisers to design robust inheritance tax strategies that align with long-term property and family goals for 2026 and beyond.