Specialist Services

Inheritance tax planning – it’s not just for old age or the very wealthy!

If your property, investments and other assets total more than £325,000, the beneficiaries of your estate could end up paying tax.  It doesn’t have to be this way.  With a bit of sensible planning, inheritance tax is often avoidable. We can help. 

Even politicians suggest we should consider (IHT) Inheritance Tax Planning

Inheritance tax, “it is broadly speaking; a voluntary levy paid by those who distrust their heirs more than they distrust the Inland Revenue.” Roy Jenkins

“We must end the iniquitous multi-taxing of the same money. It is not right to tax people’s incomes, then their savings on that income, to tax the movement of assets through capital gains tax, stamp duty and tax them again if they have the audacity to die.”  Liam Fox

Baker Davies has a lot of expertise in IHT planning, and we know that a little planning can make a huge difference. 


There are many legitimate solutions.  The first step is to do some sums. Total all your net worth, which might include equity in property, savings and investments (not protected by trusts) and if it exceeds £325,000, we should talk further.  Gifts between UK married couples and the value of family home passing to children can be exempt up to a certain amount, but you need to be sure.

If your estate is likely to be subject to inheritance tax you do have a choice.

A/         Do nothing, and your estate could have to pay tax that could have been avoided.


B/         Explore options for reducing the tax, while ensuring your financial planning is giving you all that you need.  

Regrettably, many people neglect or delay important IHT planning due to myths or misunderstandings:   

They think it’s not relevant to them.   

They may not realise how much of their estate is subject to IHT, or they think they are too young. Unmarried couples, couples without children and people with more than one property and growing portfolios of investments can very quickly exceed the exemptions and Nil rate bands.

Others miss out because they assume that in order to reduce the value of their estate, they have to lose control of their wealth or lose access to their wealth.

Neither is necessarily true. There are many ways to achieve control and access to what you need while reducing your estate’s potential inheritance tax. Baker Davies advisers have been helping many clients save thousands of pounds through IHT planning for a long time. Your adviser will explain the ins and outs suitable for your particular situation.

Another myth is that people believe you have to have live seven years for IHT planning to work. 

Again, this is not true; there are ways to reduce tax immediately, although there are more options available the sooner you plan.

Some people fear the only way to reduce IHT is through dodgy deals or expensive solutions.

Baker Davies has always been conservative in our approach to IHT planning and recommend tried and tested legitimate solutions provided by recognised product providers using trust law that is well-established.  The cost of advice is often very small compared to the massive tax saving that can be made. 

If people have capital that cannot be put in trust or otherwise taken out of the estate, life insurance can help fund the tax.

In situations where the use of life policies are appropriate, it may be that the beneficiaries would like to pay the policy premiums, as it is they who will ultimately benefit.

Another common objection we hear from clients is that they worry about IHT planning because they assume they can’t afford to give anything away, in case they need to supplement income in retirement or fund expensive care in later life.

Firstly, you don’t have to necessarily give it away to reduce IHT.  Nonetheless, it is reassuring to be able to make sensible projections about what you might need in future.  We can help do this with our Cash Flow Planning Service and with specialist later life in house advisers to assist.

At Baker Davies, we know that planning ahead can make a huge difference often very quickly, as client testimonials and case studies demonstrate. However, do remember that each client situation is different and so bespoke advice is crucial. The case studies just give a flavour of the kind of situations where we have helped people save thousands. 

IHT Case studies.

Cash Flow Planning Service

This service is where your adviser discusses your objectives, time scales, risk factors, economic growth and inflation assumptions and then uses specialist software project different scenarios into the future to help you plan

The Cash Flow Planning Service can help you work out how much you might need to save over different time scales to achieve something like a deposit for a property, or to fund school fees or further education, or for a career break.

It can help those planning for retirement, to know how much income you might need to save to achieve specific goals.


Help you understand how spending capital on something or acquiring capital might affect the amount you have to save to achieve a specific goal.

Or project how making a gift from capital might affect one’s income.

It can also help older people in retirement consider forecasts for much they can afford to pay for long term care or other services at home, should their spending needs change.

Watch the video below to find out more about the tool we use to help with cash flow planning.