How can you mitigate against Inheritance Tax?

Date Published: 03/06/2019 13:26

Back in 1789 Benjamin Franklin said: “In this world nothing can be said to be certain, except death and taxes.” The saying may be 230 years old but it is still true today – and it is true that even death doesn’t protect you from taxes!

If your estate is worth more than £325,000 everything above that figure could be taxed at 40 per cent when you die. So how can you mitigate against inheritance tax?

Here are few possible methods:

1) Give it away

The taxman can’t touch what you don’t have. But only if you live for another seven years after giving it away. Any less than seven and the inheritance tax is tapered and you need to be aware of deprivation of assets clause.

You can give away £3,000 a year inheritance tax free and there are other ways to avoid the tax, such as giving money for a wedding or civil partnership.

But do watch you don’t get tripped up by Capital Gains Tax. It might be best to get some advice.

2) Put money into a trust

Putting money in a trust for someone else effectively means you don’t own it anymore. So the taxman can’t take it into account. You do keep some control over the money, and can specify when the beneficiary can access it. But it is complicated and you do have to meet certain conditions. Again, it is worth getting advice.

3) Leave some to charity

If you leave at least ten per cent of your estate to charity, it reduces the inheritance tax due on the rest. That sounds like a win for you and a win for charity. Again, one to take advice over. But one to think about.

If you want to know any more about how you can mitigate against Inheritance Tax, please get in touch on 01246 435 996.

Contact Us

Future Life Wealth
Management Limited,
Future House,
54 Ravenshorn Way,
Renishaw, Sheffield S21 3WY

+44 (0) 1246 435 996

Opening Hours
Monday - Friday 8.30am - 5.00pm

Legal Information

Future Life Wealth Management Ltd is authorised and regulated by the Financial Conduct Authority
The Financial Conduct Authority does not regulate taxation & trust advice
We are entered on the The Financial Conduct Register No 509960 at
The Financial Ombudsman service can be found at
Registered in England No. 07036892 Reg. Address: Future House, 54 Ravenshorn Way, Renishaw, Sheffield S21 3WY
The guidance and/or advice contained within the website is subject to the UK regulatory regime and is therefore primarily targeted at customers in the UK.
The value of your investment can go down as well as up and you may not get back the full amount invested.
Your home is at risk if you do not keep up with your mortgage repayments.
Equity release is a lifetime mortgage or home reversion plan.  To understand the features and risks please ask for a personalised illustration. 
We do not offer advice in relation to home reversion plans.
The tax observations contained in this website are made in good faith and are based on our understanding of current Revenue and Customs regulations. We cannot accept any responsibility for any future regulation that may retrospectively happen.