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A comprehensive IHT plan requires action on multiple fronts. This 20-step checklist covers everything from immediate exemptions and gifting strategies to will reviews, trusts, insurance, and the major changes taking effect in 2026 and 2027. Work through each step and take professional advice on the items most relevant to your estate.
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Each step links to a full guide where relevant. Use this checklist as a starting point — the individual guides provide the detail needed to implement each action.
Add up all assets: property (at market value), savings, investments, ISAs, pension funds (from April 2027 these will be included), business interests, and personal possessions. Deduct debts and mortgage balances. This is the "gross estate" for IHT purposes.
Use our IHT calculator as a quick estimate.
Your nil-rate band is £325,000 (2025/26). If you are a surviving spouse, you may have a transferred NRB from your late partner (up to 100% of £325,000 additional). The RNRB is £175,000 per person if you own a qualifying home that passes to direct descendants — see our guide to the RNRB.
You can give away £3,000 per year free of IHT. If unused in the previous year, carry it forward for one year — giving £6,000 this year. A couple can each use their allowance: potentially £12,000 immediately exempt. See gifting strategy 2025/26.
The normal expenditure out of income exemption has no annual cap and is immediately effective. If you have income that exceeds your living costs, start a regular pattern of giving now — and document it carefully. See our full guide to normal expenditure out of income.
Potentially exempt transfers become fully IHT-exempt after 7 years. The sooner you start, the more time the clock has to run. Make sure any large PETs are not gifts with reservation of benefit — see our guide to gifts with reservation of benefit.
Wedding gifts (up to £5,000 from parents, £2,500 from grandparents, £1,000 from others) are immediately exempt. Small gifts of £250 to any number of people per year are also immediately exempt.
Keep a record of every gift made — date, recipient, amount, and the exemption or reason it qualifies. Executors will need this for the IHT400 form at death, and HMRC may require supporting evidence.
Your will should be reviewed in the light of the 2025 Budget changes, particularly if it pre-dates the BPR/APR cap (April 2026) or pension IHT rules (April 2027). Ensure it:
See our guide to how to write a will in the UK.
Leaving 10%+ of the net estate to a qualifying charity reduces IHT from 40% to 36%. Whether it benefits your family financially depends on the estate size — see our worked examples in the guide to charitable legacy to reduce IHT to 36%.
If you co-own property, check whether you are joint tenants or tenants in common. For large estates, tenants in common gives more IHT planning flexibility — the first spouse can direct their share under their will. See our guide to IHT on jointly owned property.
From 6 April 2026, BPR and APR are capped at £2.5m combined for 100% relief. If your business or farming estate exceeds this, act before the deadline. Key actions:
See our guides to BPR changes April 2026 and APR changes April 2026.
From April 2026, AIM shares drop from 100% to 50% BPR. Review whether AIM IHT portfolios are still cost-effective. See AIM shares and IHT relief changes.
Unspent pension funds fall into the taxable estate from April 2027. Calculate the combined estate value including your pension. If it exceeds the available NRBs, consider whether earlier drawdown and gifting would be more efficient. See pensions and IHT from April 2027.
Nominations direct who receives your pension on death. After April 2027, the IHT implications of spousal vs direct-to-children nominations change materially. Review all pension nominations now.
If you have life insurance not in trust, the payout falls into the estate and may be taxed at 40%. Contact your insurer to write the policy in trust — it is usually free and straightforward. See our guide to life insurance in trust.
A whole-of-life policy written in trust provides a lump sum on death to pay the IHT bill — without reducing what the family inherits. Size the policy to cover the expected IHT liability.
Settling up to the NRB (£325,000) into a discretionary trust creates no entry charge and removes that value (plus future growth) from the estate. The 10-year periodic charge applies on growth above the NRB — but at a maximum of 6%, far less than the 40% death rate. See our guide to IHT on discretionary trusts.
Review past arrangements: did you give away any asset but retain a benefit? Common examples include home-gifting, trust arrangements where you still benefit, and business property where you retain income rights. If in doubt, see our guide to gifts with reservation of benefit and the pre-owned asset charge.
If you were born outside the UK or hold non-UK domicile status, check whether you have now become a long-term UK resident under the April 2025 rules. See our guides to non-dom IHT reforms 2025 and IHT for non-UK domiciles: the new rules.
IHT planning involves legal, tax, and financial considerations that interact in complex ways. A solicitor (for will and trust drafting), an independent financial adviser (for insurance, pension strategy, and investment planning), and a tax specialist (for business and agricultural property) can each contribute to an integrated plan. The cost of professional advice is almost always less than the IHT saved by implementing the plan.
Farra can help you understand the process and connect you with the right resources. Get started with Farra for a personalised overview.
Despite Budget changes, gifting remains the most powerful IHT tool available. Annual exemptions, gifts out of income, PETs, and more — what still works in 2025/26.
From April 2027, unspent pension funds fall into your taxable estate. Worked examples show the impact and the planning steps that can still reduce the bill.
Can a deed of variation undo gifts made before the 2025 Budget? What deeds of variation can and cannot do for IHT planning, with worked examples.
A life insurance policy written in trust pays out outside your estate, avoiding IHT on the proceeds. How trusts work, which to use, and the steps to set one up.
Discretionary trusts face a 10-year periodic IHT charge and an exit charge when assets leave. How the calculations work, what rates apply, and when trusts still make sense.
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