A standard Inheritance Tax (IHT) rate of 40% can significantly reduce the amount passed onto your children or other beneficiaries. However, with careful forward planning, you can reduce your tax liabilities to ensure your loved ones benefit from your hard-earned money – not the tax man.
Whether you’re starting estate planning or reviewing existing arrangements, Lumin is here to guide you through personal hands-on services backed by years of experience.
Chartered Financial Planning Manager
In 2024/25, £8.2 billion in IHT was paid to HMRC setting a new record for IHT receipts. And with pensions set to fall into the IHT net from April 2027, securing your legacy has never been more important.
Come meet our Financial Consultants in person to learn more about the upcoming changes to IHT taking effect from April 2027. Our regional seminars are designed to help you understand what the government changes mean for you and how to plan ahead tax-efficiently.
In a constantly evolving tax landscape, protecting your legacy has never been more important.
Inheritance tax
How can I reduce my IHT liability?Do you know your current inheritance tax (IHT) position? Have you started taking measures to reduce your IHT liabilities? Have your liabilities increased due to record house prices? Are your insurance policies placed in trust for IHT-free payouts? How are you using your pension assets? Are your beneficiaries in line with your wishes?
There are many ways to save IHT and each action has different consequences. It is important to plan early, and coordinate all the steps that will reduce your IHT bill. Get in touch with a Lumin expert to find out which solutions may be best suited to help you save IHT.
Estate planning
Which IHT exemptions and allowances do I have available?Which of your assets are not subject to inheritance tax (IHT)? Are you maximising your IHT-free thresholds (nil-rate bands, or NRBs)? Have you claimed a spouse’s unused NRBs? Are you affected by a reduced residence NRB (RNRB) due to record house prices? Are you using your gift allowances?
The NRB is £325,000 per person, or £650,000 for couples. Transfers between a married couple or civil partners are exempt from IHT. A RNRB of £175,000 per person is available to cover the value of your main home, but the RNRB is reduced for estates over £2,000,000. If you make a gift and survive for seven years then the money is outside of your estate.
Speak to a Lumin expert to maximise your IHT breaks.
Putting your wishes onto paper
Why are a will and LPA so important?Do you have a will? Has a change in personal circumstances invalidated an existing will? Do you have a lasting power of attorney (LPA)?
Making a will is an important part of estate planning and will ensure that your assets are distributed in line with your wishes. A will can also help to reduce IHT. If you die without a valid will your estate will be distributed according to the fixed rules of intestacy.
An LPA ensures that financial and healthcare affairs can be managed on your behalf by your family in the event of you losing capacity. This provides peace of mind that you have covered all eventualities for the future.
Taxes
Should I use trusts?Do you have the right tax wrappers? Are you make full use of your tax allowances? Do you know the cost of your investments? Is your long-term investment strategy aligned with your goals?
It’s important that your investment manager is independent and unbiased when constructing your portfolio. Speak to a Lumin expert to review your investments.
Pensions
Will my pension pot fall into the IHT net?From 6 April 2027 the rules change: most unused pension funds and lump-sum death benefits will be treated as part of your estate for Inheritance Tax (IHT) purposes. As a result, if your total estate, including any pension pot that hadn’t been drawn down, exceeds the IHT threshold (currently £325,000, or higher with the residence nil-rate band), IHT could become payable. Note that some exceptions remain. For example, “death-in-service” lump sums from a registered pension scheme are excluded from IHT under these new rules. Because of this change, pensions may now fall into the IHT net for many individuals who previously assumed they were exempt, so it’s wise to review estate plans and beneficiary nominations accordingly.
Want to review your plans in light of upcoming changes?
We can help you make the most of annual gift allowances, trusts and other exemptions to reduce the size of your taxable estate, whilst supporting loved ones during your lifetime.
With pensions soon to be included in your estate (from April 2027), we offer expert advice on how to structure your assets tax-efficiently to mitigate tax exposure.
Our team of advisers work with you to ensure your assets are streamlined, your estate is optimised and your loved ones can benefit.
How effectively is your cash flow supporting your financial goals? Our experts uncover opportunities to strengthen your financial position.
This free publication is distributed to thousands of households three times a year. Serving as your go-to resource, it offers expert insights on the financial planning questions that matter most.
Organise a complimentary introductory meeting with a Lumin adviser to explore the different options available.
Get regular investment updates straight to your mailbox every month. Subscribe now free of charge.
Your benefit: Trusted, independent advice to find the best solutions for you and your family