From 2027 more people in Scotland will become liable for inheritance tax than ever before with changes to pensions legislation bringing the value of your pension into your estate.
You’ve worked hard throughout your life to build wealth and now want to ensure it passes efficiently to the next generation.
At Wellington Wealth, we specialise in comprehensive inheritance tax planning that helps you transfer wealth to future generations in the most efficient way possible.
Our luxury boutique financial planning firm in Glasgow creates personalised inheritance tax strategies that reflect your values and wishes, identifying opportunities to reduce potential tax liabilities while ensuring your assets go to the people and causes that matter most to you.
Through sophisticated planning techniques and genuine understanding of your family circumstances, we transform complex tax regulations into clear, actionable strategies that empower you to create a lasting financial legacy with confidence.
Understanding Inheritance Tax
Inheritance tax (IHT) is a tax levied on the estate of someone who has died, including their property, money, and possessions. Currently, inheritance tax is often not payable if the total value of your estate is worth less than £325,000 (the nil rate band) or if you leave everything above this threshold to your spouse, civil partner, or a charity.
The standard inheritance tax rate is 40% on the part of your estate that exceeds the threshold. However, there are various allowances, exemptions, strategies and reliefs that can help reduce the amount of inheritance tax payable, making professional inheritance tax advice essential for effective estate planning.
Key Inheritance Tax Thresholds and Allowances 2025/26
- Nil Rate Band: Everyone has a tax allowance of £325,000, below which no inheritance tax is payable.
- Residence Nil Rate Band: An additional allowance (currently £175,000) may be available when your main residence is passed to direct descendants.
- Spouse/Civil Partner Exemption: Assets passed to a spouse or civil partner are generally exempt from IHT, and any unused nil-rate band can be transferred to them.
If your estate is worth more than these combined thresholds, the beneficiaries of your estate may need to pay inheritance tax on the excess amount at 40%. This potential tax burden makes inheritance planning crucial for many families.
Our Inheritance Tax Planning Approach
The foundation of effective inheritance tax planning is understanding the total value of your estate for tax purposes. Our service begins with a thorough assessment of your assets, including property, investments, business interests, and personal possessions. This detailed valuation helps assess your potential IHT liability and forms the basis for creating tailored strategies.
Inheritance tax planning requires regular review, particularly given the frequency of legislative changes. We recommend periodic assessments to ensure your arrangements remain appropriate and effective.
Tailored Inheritance Tax Strategies
There are a number of tax reliefs and smart strategies that are available to many people who have absolutely no idea they exist. Just some of the potential options available include:
Gifts
Making gifts during your lifetime can be an effective way to reduce the amount of inheritance tax due after your death. These include annual exemptions (£3,000 per tax year), small gifts exemption (£250 per person per tax year), gifts made from normal expenditure out of income, and potentially exempt transfers (PETs).
Potentially exempt transfers become free from IHT if you survive for at least seven years after making the gift. Our advisers help you understand how gifts made in the seven years before death may still affect your inheritance tax bill.
Trusts
Trusts can be valuable tools in inheritance tax planning, allowing you to remove assets from your estate while maintaining some control, provide for vulnerable beneficiaries, and protect assets from relationship breakdown.
We advise on various types of trusts, including discretionary trusts and loan trusts, helping you select the most appropriate options for your circumstances. The use of trusts must be carefully planned, as different trust structures have different tax consequences.
Property Relief on Estates
For business owners and those with agricultural assets, Business Property Relief and Agricultural Property Relief can provide valuable inheritance tax exemptions, potentially reducing IHT liability by 50% or 100%.
Life Assurance policies
Strategic use of life assurance can help provide funds to pay the IHT bill, allowing assets to pass intact to beneficiaries whilst remaining fully compliant with the HMRC as life assurance policies written in trust fall outside your estate for inheritance tax purposes, providing liquidity exactly when needed.
Pensions
Pensions can be highly effective in inheritance tax planning as they typically fall outside your estate. We provide guidance on maximising pension contributions where appropriate and structuring pension death benefits for optimal tax efficiency.
Why Choose Wellington Wealth for Inheritance Tax Planning
Independent Expert Advice
As independent financial advisers directly authorised and regulated by the Financial Conduct Authority (FCA Registration No. 717874), we provide truly unbiased recommendations. Our inheritance tax planning advice isn’t designed to sell specific products but to create genuine solutions that align with your family’s needs.
Specialist IHT Planning Knowledge
Inheritance tax planning is a complex area requiring specialist knowledge. Our tax advisers have extensive experience in this field and stay current with legislative changes and planning opportunities. We understand not just the technical aspects of inheritance tax planning but also the sensitive family discussions that often accompany it.
Coordinated Approach
Effective inheritance tax planning requires collaboration with other professionals. Wellington Wealth works closely with your solicitor for will drafting and trust establishment, ensuring all aspects of your estate planning work harmoniously, avoiding potential conflicts or unintended consequences.
Benefits of Inheritance Tax Planning
The most immediate benefit is reducing the amount of IHT payable on your estate, maximising the assets passing to your chosen beneficiaries rather than HMRC. Effective planning helps ensure your loved ones benefit from your estate without unnecessary tax charges, providing financial security for future generations.
Through careful estate planning and the use of wills and trusts, you maintain control over how and when your assets are distributed, even after your death. For business owners, proper inheritance tax planning supports smooth succession, helping ensure business interests can transfer without forcing a sale to pay tax liabilities. Being free of inheritance tax completely might not be an option, but you should never have to pay IHT over the odds.
Important IHT Considerations
The earlier you start planning, the more options are available. Some strategies, like potentially exempt transfers, only become fully effective after seven years. The best inheritance tax planning builds in flexibility to adapt to changing personal, family, and legislative circumstances.
While reducing inheritance tax is important, your financial security during your lifetime must remain the priority. Our holistic approach ensures your own needs are properly considered.
The executor of your will is responsible for calculating and paying inheritance tax before distributing assets to beneficiaries. Choosing the right executor and ensuring they understand their responsibilities is an important part of your estate planning.
Dying without a valid will (intestacy) can create significant inheritance tax issues as your estate may not be distributed in the most tax-efficient manner. Additionally, the intestacy rules may not reflect your wishes regarding who should benefit from your estate.
When to Seek Professional Tax Advice
You should consider inheritance tax planning advice if your estate is likely to exceed the nil rate band, you own business or agricultural assets, you wish to make significant lifetime gifts, you are concerns about inheritance tax liability, you have complex family circumstances, or you want to include charities in your estate planning.
Take the First Step
Your lifetime of hard work deserves to create opportunities for those you care about most. At Wellington Wealth, we’re committed to delivering personalised, independent IHT planning guidance that helps you create an efficient plan for transferring wealth while minimising inheritance tax.
Book your free initial meeting today to discover how our boutique approach to inheritance tax planning can help you build a meaningful legacy with confidence.
Contact us on 0141 221 3222 or email hello@wellington-wealth.com to arrange your appointment. Alternatively, complete our online contact form, and one of our advisers will be in touch within one working day.
