Call us on 0330 111 3131 or get in touch via our online enquiry form. We’ll give you straightforward advice on where you stand and what it’s likely to cost.
What is inheritance tax?
Inheritance tax is a tax on the estate of someone who has died, charged at 40% on the value above the available tax-free thresholds. Every individual has a nil-rate band of £325,000, plus, in many cases, a residence nil-rate band of up to £175,000 where a home passes to direct descendants.
Both thresholds have been frozen since 2009 and 2020/21 respectively, and are set to remain frozen until at least April 2031 following the November 2025 Autumn Budget. Because property values and savings have generally risen while the thresholds stayed still, more estates are being pulled into paying inheritance tax than in previous years, even ones that wouldn’t have considered themselves particularly wealthy.
Reliefs and exemptions worth knowing about
Spouse and civil partner exemption: Anything left to a spouse or civil partner is entirely exempt, and their unused nil-rate band and residence nil-rate band transfer to the survivor, giving a couple up to £1 million combined tax-free.
The 7-year rule on gifts: Gifts made more than 7 years before death are usually outside your estate entirely; gifts within 7 years may still be taxed, on a reducing scale known as taper relief.
Annual gift exemptions: You can give away £3,000 each tax year, plus £5,000 towards a child’s wedding, without it counting towards the 7-year rule at all.
Normal expenditure out of income: Regular gifts from surplus income, rather than capital, can be exempt immediately, provided they don’t affect your own standard of living.
Business and Agricultural Property Relief: From 6 April 2026, the first £2.5 million of combined qualifying business and agricultural property gets full relief, with 50% relief above that, an effective 20% rate.
A significant change is coming: pensions and inheritance tax
From April 2027, most unused pension funds and death benefits will be brought within the scope of inheritance tax for the first time, following changes announced in the October 2024 Budget. Pensions have traditionally sat outside the taxable estate, so this genuinely changes the planning picture for anyone with significant pension savings.
If your current plan relies on leaving pension savings largely untouched to pass tax-free to your family, it’s worth revisiting that assumption before the change takes effect, rather than after. We’re following the detailed rules closely as they’re finalised.
Practical ways to reduce an inheritance tax bill
There’s no single fix, but a combination of these usually makes a genuine difference.
Making use of gift allowances: Regular use of your annual exemption and gifts from surplus income can steadily reduce your estate without waiting out the full 7-year rule.
Considering a Trust: Trusts can move assets out of your estate while retaining some control over how and when beneficiaries benefit, see our Trust solicitors
Reviewing business and agricultural assets: With the new cap on 100% relief from April 2026, business owners and farmers should check whether their current structure still delivers the protection they’re expecting.
Life insurance to cover the bill: A policy written into an appropriate Trust can provide funds to pay the tax without needing to sell assets or delay distributions to your family.
Paying inheritance tax
Inheritance tax must generally be paid within 6 months of the death, or HMRC starts charging interest, and often needs to be paid, at least in part, before the Grant of Probate is issued. Tax on assets qualifying for Business Property Relief or Agricultural Property Relief can be paid in equal instalments over 10 years, interest-free, which can ease the pressure where the estate’s wealth is tied up in a business or farm rather than cash.
Why choose Slater Heelis for inheritance tax planning
We’ve been advising families across the North West for over 250 years, and we’re listed in The Times Best Law Firms for 2026 and recognised by The Legal 500 as one of the leading firms in the North West.
Straight-talking advice: No jargon, no hedging, just a clear explanation of your options and what they’re likely to cost.
Genuinely experienced team: Alex Sealy leads our Wills, Trusts and Probate team, and several of our Private Client partners are members of STEP and Solicitors for the Elderly.
Rated by real clients: Over 1,900 five-star reviews and a 4.9 out of 5 average rating on ReviewSolicitors.
Inheritance tax solicitors in Manchester, Sale and Chester
We advise on inheritance tax planning across Manchester, Sale and Chester, as well as clients further afield across the UK and overseas, often working alongside your accountant or financial adviser.
Our offices in Manchester, Sale and Chester are open for face-to-face meetings, and we work with clients across the UK and overseas, with appointments available at our other locations in London, Liverpool, Leeds, York and Sheffield when that’s more convenient for you
Want a clearer picture of your inheritance tax position?
An early conversation gives you more options than waiting until later. Call us on 0330 111 3131, or get in touch via our online enquiry form.
The nil-rate band is £325,000 per person, plus up to £175,000 in residence nil-rate band where a home passes to direct descendants, giving a combined £1 million for a married couple. Both are frozen until at least April 2031.
Do I have to pay inheritance tax on gifts I make while alive?
Not immediately, but gifts made within 7 years of death can still be brought back into your estate for inheritance tax purposes, on a reducing scale the longer before death they were made. Gifts made more than 7 years before death are usually outside your estate entirely.
Is inheritance tax paid before or after Probate?
Often before, or at least partly before. Payment is generally due within 6 months of death, and in many cases some or all of it needs to be paid before the Grant of Probate is issued.
Can I avoid inheritance tax completely?
For most people, no, not entirely, but careful planning, using reliefs, exemptions, Trusts and gifting, can significantly reduce the bill your family eventually faces. Fakhruddin Maimoon and our wider Private Client team can advise on what’s realistically achievable for your circumstances.
Will my pension be subject to inheritance tax?
Not currently, but most unused pension funds and death benefits will be brought within the scope of inheritance tax from April 2027. If you have significant pension savings, it’s worth reviewing your planning now rather than waiting.
What happens if I can't afford to pay the inheritance tax bill?
Executors can sometimes access funds directly from the deceased’s accounts, arrange a short-term loan against the estate, or, for qualifying business and agricultural assets, pay in interest-free instalments over 10 years.
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