“The Treasury is on course for another record-breaking year of revenues from IHT,” said Ian Dyall, head of estate planning at Evelyn Partners.
Meanwhile, Nicholas Hyett, investment manager at Wealth Club, warned that despite recent hikes, “The Chancellor shook the IHT piggy bank pretty hard last year, but that doesn’t mean she won’t come back looking for more.”
However, experts say there are legitimate ways to reduce future tax burdens starting with gifting.
Rachael Griffin, tax and financial planning expert at Quilter, highlighted that households can give up to £3,000 a year in gifts to loved ones that are completely exempt from IHT. “One of the most underused and effective exemptions is gifting out of surplus income,” she explained.
“This can be particularly powerful for retirees with strong pension income or reliable investment returns, but the key is to keep good records and make the gifts regular and consistent.”
Other options include discretionary trusts, discounted gift trusts, and loan trusts, which can move assets outside your estate while keeping flexibility for beneficiaries.
Griffin added: “It might sound obvious, but one of the simplest ways to reduce inheritance tax is to enjoy your wealth while you’re alive. Going on big trips, funding family experiences, or simply living more generously can all bring joy and reduce your estate. With the right financial plan, you can spend confidently without compromising your own security.”
