the government<\/a> intends to bring retirement savings within scope for the first time.<\/p>\nNicole, who goes by The London Accountant on social media, said: \u201cThe greater exposure is likely on second death \u2013 if my husband passed away too \u2013 when our combined estate is assessed.<\/p>\n
\u201cAny amount passing to our children above the available allowances would be subject to IHT at 40 per cent.\u201d<\/p>\n
Meanwhile, her shares in an accountancy firm should qualify for 100 per cent business relief, which effectively exempts these assets from IHT, with a \u00a32.5m threshold for 100 per cent relief from 6 April 2026.<\/p>\n
Families can only get IHT relief on shares if the deceased has owned the business or asset for at least two years before they died.<\/p>\n
Nicole has emphasised the importance of planning beyond the first death in a marriage.<\/p>\n
Although unused nil-rate bands can transfer between spouses, the 40 per cent rate on amounts above \u00a3325,000 per person \u2013 \u00a3650,000 combined \u2013 remains a major consideration for many families.<\/p>\n
Early planning with young children<\/p>\n
With two children aged three and five, Nicole has planned ahead.<\/p>\n
She said: \u201cAt this stage, my planning is relatively straightforward. I\u2019ve set up a relevant life policy through my company, written into trust, so any proceeds sit outside my estate.\u201d<\/p>\n
A relevant life policy is an insurance policy paid by an employer that pays a lump sum to the policyholder\u2019s family if they die while covered.<\/p>\n
By writing the policy into trust \u2013 a legal arrangement where money is held by trustees for named beneficiaries \u2013 the payout can be made quickly and usually sits outside the estate for IHT purposes.<\/p>\n
Such policies are often overlooked, Nicole said, yet they can provide a tax-efficient lump sum for loved ones while helping families plan ahead.<\/p>\n
She also makes annual gifts of \u00a33,000 into accounts in her children\u2019s names \u2013 the maximum amount each person can give each tax year without it being added to the value of their estate for IHT.<\/p>\n
Key strategies and policy changes<\/p>\n
The decision to bring pensions into the IHT net, announced in the 2024 autumn Budget, has prompted Nicole to reassess her approach.<\/p>\n
The proposals aim to close loopholes that allowed pensions to be used as tax-efficient vehicles for passing on wealth rather than funding retirement.<\/p>\n
She said: \u201cIt hasn\u2019t discouraged me from contributing to pensions, but it has shifted my focus slightly towards gifting to my children using investment products such as junior ISAs so their capital can start compounding early.\u201d<\/p>\n
Other considerations include business relief which reduces or eliminates IHT on qualifying business assets transferred during life or at death.<\/p>\n
Currently, 100 per cent relief is available; from 6 April, it will be capped at 100 per cent on the first \u00a32.5m and 50 per cent thereafter.<\/p>\n
As a limited company owner, Nicole expects her shares to qualify.<\/p>\n
But for significantly larger estates that include assets such as investment portfolios or property, more advanced structures may be appropriate.<\/p>\n
Options such as family investment companies \u2013 a private company set up to hold family investments \u2013 are designed to move future increases in value outside the estate while allowing the original owner to retain oversight and control.<\/p>\n
Such approaches are more commonly used for larger estates because they can help limit IHT on future growth, maintain control over assets, and support long-term succession planning.<\/p>\n
She said: \u201cThese arrangements introduce additional complexity and cost, so any decision to pursue them should weigh those factors against the potential tax benefit.\u201d<\/p>\n
Pitfalls even experts encounter<\/p>\n
Despite her professional background, Nicole found estate planning more nuanced in practice than it appears on paper.<\/p>\n
One unexpected challenge was making sure her legal documents supported her tax planning.<\/p>\n
In practical terms, this meant checking that her will, shareholder agreement and pensions all directed money to the same people, in the intended proportions, and in the most tax-efficient way.<\/p>\n
If these documents conflict or are out of date, assets can pass in unintended ways or lose valuable tax protections.<\/p>\n
She said: \u201cThe tax position might be clear [meaning you understand which reliefs or exemptions should apply and how to minimise IHT] but if the legal structure doesn\u2019t support it, the planning can fall apart.\u201d<\/p>\n
Common mistakes to avoid<\/p>\n
One of the most frequent errors is failing to maintain a properly drafted, up-to-date will.<\/p>\n
Without regular review, valuable allowances can be lost and assets may not pass in the most tax-efficient way, even when families believe their planning is sound.<\/p>\n
Nicole\u2019s advice is to start with a well-drafted will and review it regularly. This ensures allowances are preserved and enables tax-efficient strategies, including gifting and trusts, to function as intended.<\/p>\n","protected":false},"excerpt":{"rendered":"Nicole Zalys, a 36-year-old chartered accountant from London, explains how families can reduce this burden Inheritance tax, often…\n","protected":false},"author":2,"featured_media":505391,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[39],"tags":[28,47778,5722,147,530,1666,3733],"class_list":{"0":"post-505390","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-inheritance-tax","10":"tag-pensions","11":"tag-personal-finance","12":"tag-personalfinance","13":"tag-retirement","14":"tag-tax"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/505390","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=505390"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/505390\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/505391"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=505390"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=505390"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=505390"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}