Inheritance Tax

Inheritance tax (IHT) is a tax on the estate of someone who has died, including their property, money, and possessions. For many, it is a significant concern that requires constant review. 

Without effective planning, a substantial portion of the wealth you have worked hard to create could be subject to a 40% tax rate, reducing the legacy left to your chosen beneficiaries.

Inheritance tax matters because it is a fast-paced and complex area of legislation. Effective estate planning ensures that your assets are structured efficiently, allowing you to pass on your wealth to loved ones while staying compliant with ever-changing HMRC rules. 

Whether you are looking to protect a family business, manage property holdings, or navigate complex international assets, proactive planning is essential to minimise liability and provide peace of mind for the future.

At Alexander & Co, our approach to inheritance tax planning is holistic. We recognise that IHT does not exist in a vacuum; it often intersects with capital gains tax, income tax, and property regulations. 

Our methodology is built on understanding your specific objectives and providing a comprehensive strategy that protects your assets and maximises the wealth available for future generations. 

We don’t just put a plan in place and leave it; we ensure your strategy remains effective through regular reviews.

Our process is principle-based and focused on delivering practical value at every stage. We begin by reviewing your current situation, including all assets, business interests, and existing wills. 

From there, we work with you to implement tailored strategies, such as the use of trusts or Family Investment Companies (FICs) notifying HMRC where necessary and handling all ongoing compliance. 

We can also liaise with trusted partners, including lawyers and independent financial advisors, to ensure your plan is robust and covers every eventuality.

Our team consists of highly qualified tax specialists, including Chartered Tax Advisers (CTA) and Trust and Estate Practitioners (TEP). We have deep expertise across diverse sectors, including property, manufacturing, retail, and hospitality. 

We are particularly skilled in assisting owner-managed businesses and families with complex UK and international tax affairs. By working with us, you gain access to senior-level expertise that understands the commercial drivers behind your wealth as well as the technical nuances of tax law.

We offer a comprehensive range of outcome-focused services to protect your estate:

We are also able to provide expert advice on the wider issues of wills and financial advice relating to inheritance tax through our network of trusted partners.

The primary value of inheritance tax planning is the preservation of your legacy. By taking action, you can significantly reduce the tax burden on your estate, ensuring that more of your wealth reaches your family rather than the Treasury. 

Effective Inheritance Tax Planning also provides clarity, reducing the risk of family disputes and ensuring that business operations can continue smoothly without the sudden pressure of a large tax bill.

The standard inheritance tax rate is 40% on the part of your estate that is above the threshold (nil-rate band), which is currently £325,000. There is also a residence nil-rate band available when passing a home to direct descendants. Different thresholds apply to Agricultural businesses.

However, these thresholds have been frozen for many years, and upcoming reforms to reliefs, particularly for business and agricultural assets, mean that many more individuals will find their estates liable. 

Understanding how these thresholds apply to your specific mix of assets is the first step in effective planning.

Commencing April 2026, Business Property Relief, alongside Agricultural Property Relief, is being significantly restricted. The current rate of relief will continue at 100% for the first £2.5 million of combined business and agricultural assets on top of the existing nil-rate bands. (This was increased from a proposed £1m in December 2025). The rate of relief will reduce to 50% after the first £2.5 million. AIM shares will be restricted to 50% relief on all their value.

To give an example, if a person passes holding shares in a trading company worth say £10m then currently there would no IHT.  There would be £1.5m of IHT wen the new rules are applied.

We can provide advice on mitigation strategies to help combat this increase.  Family businesses need to be considering succession planning early. If this applies to your circumstances, please contact us to discuss this with our tax team further.

Choosing Alexander & Co means partnering with a firm renowned for credibility and trust. With a 50-year track record, we are consistently recognised for our excellence, including being shortlisted for “Best Tax Advisory” at the Rainmakers Awards and for multiple categories at the Tolley’s Taxation Awards. 

As an independent firm with offices in Manchester and London, we provide a partner-led service that prioritises your specific business and personal goals, ensuring you only pay the tax you ought to.

Our specialist tax team is available to discuss your requirements and help you protect your family’s future.

To discuss the Inheritance Tax support and advice available to you or your business, please contact one of our inheritance tax experts with your enquiry today.

For more information on how we can support your or your business please email us at info@alexander.co.uk or alternatively fill in our online enquiry form.