In an era when asset values are soaring yet the UK’s Inheritance Tax (IHT) thresholds remain unchanged, more estates are being pulled into the tax net than ever. According to industry data, IHT receipts reached approximately £8.2 billion in 2024-25 a burden many families simply did not anticipate.
For business owners, investors, and families with private wealth, the question isn’t just “how much should I leave?”, but “how much will actually arrive?” . Here are five key strategies for wealth-holders to consider now, to protect more of their legacy from the taxman.
1. Early & Strategic Gifting
Gifting remains one of the most effective though frequently overlooked levers in IHT planning. Lifetime gifts made outside the estate can reduce the value subject to tax. As noted by advisers, applying the annual £3,000 exemption, or larger gifts that qualify as “Potentially Exempt Transfers”, forms a core part of tax-efficient estate planning.
Successful gifting strategies are rarely spontaneous: they require timing, documentation, and alignment with broader business/estate plans.
2. Using Trusts & Holding Structures
Transferring assets into a properly structured trust can effectively remove them from the IHT estate. A trust gives you control while shifting ownership and ownership exposure. The official guidance warns: “A trust is a way of keeping control and asset protection…and may mean the asset isn’t counted when valuing your estate.”
For owners of private companies or trading businesses, this is especially relevant: aligning business exit plans with trust structures avoids forced disposals and preserves legacy value.
3. Harnessing Life Cover & Business Protection
Life insurance and business-protection policies are not merely safety nets they are strategic tools in estate planning. For example, whole-of-life policies held in trust sit outside the estate and can be used to settle IHT bills when they arise.
For directors and shareholders, combining business-protection cover (key person, shareholder protection) with legacy-life solutions creates liquidity for heirs without forcing business sale or asset erosion.
4. Charitable Giving & Rate Reduction
One of the less discussed but highly effective tactics is leveraging philanthropic legacy as part of an IHT plan. Estates that leave 10 % or more of their net value to charity may qualify for a reduced IHT rate of 36 % (down from 40 %).
Beyond tax efficiency, this aligns with many HNW families’ desire to combine legacy, purpose and philanthropy.
5. Regular Review & Governance in an Evolving Tax Landscape
Tax laws are rarely static. From 2027, UK rules will include most unused pension pots within IHT-exposure frameworks.
This makes scheduled reviews essential. Systems should be in place to monitor thresholds, reliefs, and business / family-office structures not once, but as part of ongoing governance.
Final Word
When it comes to legacy, many believe the hard part ends at wealth creation. In truth, for high-net-worth individuals and business owners, the hard part starts when protecting and passing that wealth in a tax-efficient way. At TSC, we recognise that for you, it is not just about what you leave behind it’s about how it is left behind. Being proactive today is the only way to make sure your legacy tomorrow is your own.