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Inheritance Tax Planning
The foundation of all Bluebond services, focused on structuring estates to reduce
inheritance tax while maintaining liquidity and lifestyle continuity.
What is inheritance tax planning?
Inheritance Tax is charged at 40% on estates above the available allowances, making it one of the greatest risks to preserving family wealth in the UK.
Inheritance planning ensures your wealth is passed to the right people in the most efficient way, reducing unnecessary tax and complexity.
At Bluebond, we help families structure their estates with clarity and purpose, creating plans that protect family wealth, maintain access to funds when needed, and ensure wealth continuity across generations.
19 / 20
Bluebond clients legitimately pay
zero inheritance tax through our
proven strategies.
OUR EXPERTISE
Proven approaches to reduce inheritance tax
Key Methods:
- Nil-Rate Band (NRB) – £325,000 tax-free per person.
- Residence Nil-Rate Band (RNRB) – £175,000 extra if leaving your home to direct descendants.
- Transferable Allowances – Any unused NRB or RNRB from a late spouse can be passed to the survivor (up to £1M for couples).
- Spousal Exemption – Unlimited transfers between UK-domiciled spouses or civil partners, free of IHT.
Gifting is one of the most effective long-term IHT reduction tools, provided it’s done strategically and early.
Key Methods:
- Potentially Exempt Transfers (PETs) – Gifts are IHT-free if you live for 7 years after making them.
- Taper Relief – Reduces tax gradually for gifts made 3–7 years before death.
- Regular Gifts from Income – Gifts made regularly from surplus income (not capital) are exempt immediately.
- Annual Exemption – £3,000 per donor per year.
- Small Gifts – Up to £250 per person per year.
- Wedding Gifts – £5,000 to a child, £2,500 to a grandchild, £1,000 to others.
Read: How the 7 Year Inheritance Tax Rule Works
Watch: How can you give money to your children without breaking the 7 year IHT rule
Trusts can shift ownership of assets for IHT purposes while protecting beneficiaries and preserving control.
Key Methods:
- Discretionary Trusts – Allow flexibility in who benefits and when.
- Interest in Possession Trusts – Provide income to one person while preserving capital for others.
- Loan Trusts – You loan money to a trust; growth escapes IHT, and you can recall the original sum.
- Discounted Gift Trusts – Combine gifting with retaining a fixed income stream.
- Bare Trusts – Simple trusts that gift outright to beneficiaries (often children), usually with minimal control.
Note: Trusts have periodic and exit charges but are still powerful for long-term estate planning.
Key Methods:
- business relief (BR) – Applies to qualifying trading businesses, unlisted shares, and some AIM-listed companies.
- agricultural relief (AR) – Applies to farmland and agricultural buildings.
- AIM Portfolios – Professionally managed portfolios investing in BR-qualifying companies; used for liquidity and control.
Note: BR-qualifying investments carry investment risk. Suitability, product choice and implementation of any regulated investment must be handled by an FCA-authorised financial adviser; we can introduce you to our independent partner firm.
FICs allow wealth to be retained and grown within a company structure, while future growth passes to children through shareholdings.
Key Advantages:
- Retain control through voting shares.
- Pass value through non-voting shares.
- Potentially more tax-efficient than trusts for larger estates.
- Allows professional management and family governance.
Donations to UK-registered charities reduce the taxable value of your estate and can lower your overall IHT rate.
Key Methods:
- 100% exemption for assets left to charity.
- Reduced IHT rate (36%) if at least 10% of your net estate is donated to charity.
Life insurance doesn’t reduce IHT directly, but provides liquidity to pay the tax — ensuring heirs don’t need to sell assets.
Key Steps:
- Arrange a Whole of Life policy through an authorised provider (we can introduce you to our independent partner firm).
- Write it in trust to keep proceeds outside your estate.
- Premiums may qualify as “gifts from income” if paid regularly.
Defined contribution pensions typically fall outside the IHT estate for now, making them one of the more tax-efficient vehicles for intergenerational wealth — though from 6 April 2027, most unused pension funds and death benefits will be brought within the IHT estate, so this treatment is due to change.
General planning points to discuss with a regulated adviser:
- Pensions can often be left untouched to preserve their tax efficiency.
- Nominations should be reviewed regularly.
- Specific pension decisions should be taken with an FCA-authorised financial adviser.
Read: How to Avoid Inheritance Tax on Your Pension After the 2024 Budget Changes
IHT applies based on long-term residency. Planning long-term residency status can significantly reduce exposure.
Key Strategies:
- Non-UK long-term resident: Only UK assets are taxable.
- Excluded Property Trusts: Offshore trusts created before becoming long-term resident in the UK can shelter worldwide assets.
Estate and tax laws change frequently; ongoing reviews ensure your plan remains efficient and compliant.
Key Recommendations:
- Update Wills and ownership structures (e.g., tenants in common).
- Review IHT exposure annually.
- Adjust for new rules, allowances, or family changes (marriage, births, business sale).
WHY CHOOSE BLUEBOND
The Bluebond difference
Legal Excellence
Qualified solicitors employed within our business make sure every structure is robust, compliant, and defensible under UK tax and trust law.
Tax Strategy
Deep expertise in IHT legislation allows us to identify and implement strategies that are often overlooked.
Wealth Planning
Working with our independent FCA-regulated financial planning partner, we make sure tax efficiency does not compromise liquidity, income needs or lifestyle goals.
Start protecting your family’s wealth today
Join the 19 out of 20 families who pay zero inheritance tax through our proven
strategies.
