Inheritance tax planning in Brentwood
Independent inheritance tax planning in Brentwood, Essex, and the surrounding area.
People spend a lifetime building up a home, savings and pensions, and for a long time there was little reason to think about how it would be passed on. Inheritance tax was something for the very wealthy. That has changed, and from April 2027 most unused pensions will count too. Plenty of families in and around Brentwood could now face an inheritance tax bill without ever thinking of themselves as wealthy, and many aren’t sure what that means for the people they’d leave behind.
I start by working out your position today: what your estate is worth, whether a bill is likely, and what you’d like to happen to it, so more of what you’ve built reaches the people who matter to you.
By the end, you’ll know whether your family faces a bill, roughly how big it could be, and what you can do about it while you’re here to decide, so you can stop wondering and know it’s in hand.
Do pensions count for inheritance tax?
Until now, most pensions have sat outside your estate. From April 2027, unused pension funds will normally be included when inheritance tax is worked out. If you die after 75, whoever inherits it may also pay income tax on what they draw, on top of any inheritance tax. I’ll show you what it means in practice, with real numbers.
Will my family pay inheritance tax on the house?
The family home is often the biggest part of an estate, and as its value has risen, it’s frequently what takes an estate into inheritance tax. There’s an extra tax-free allowance when your home goes to your children or grandchildren (including step-children). It only applies if the home goes to them directly, and it’s reduced for larger estates.
Married couples and civil partners can usually pass unused allowances to each other. Divorce ends that, so if you’ve separated, it’s worth checking what that means for you now.
I’ll add up what you own, apply the allowances you’re entitled to, and show you the figure your family could face. If you don’t qualify for the home allowance, I’ll show you the options, and work with your solicitor if your will needs to change.
What is the 7 year rule?
Giving money away while you’re alive can bring a bill down. If you live for seven years after a gift, it normally falls outside your estate. If you die within seven years, it may still count, although the tax can reduce after three years. Some gifts are exempt straight away, including regular gifts from spare income.
When should I start thinking about inheritance tax?
Earlier than most people think. If you’re in your forties or fifties, with pensions and investments still growing, your estate can grow into it long before you retire. The tax-free allowances have been frozen for years, while house prices, pensions and investments have kept rising, so the gap widens every year. Once an estate passes £2 million, it also starts to lose the extra allowance for the family home.
As an example, an estate worth £1.2 million today (a house worth £750,000, pensions of £350,000 and £100,000 in savings and investments), growing at 5% a year, would pass £2 million in around 11 years.
An inheritance tax bill usually has to be paid before probate, which can hold everything else up for your family. Planning for this early gives you far more options.
Working with your solicitor
Wills, trusts and lasting powers of attorney are a solicitor’s job. I’ll work alongside yours, or introduce you to one, so the financial plan and the legal side fit together.
I meet clients in and around Brentwood, Shenfield, Billericay, Upminster and Chelmsford, and anywhere else by video call.
You don’t need any paperwork to start. A rough idea of what you own is enough.
Will writing and advice on Lasting Powers of Attorney are not regulated by the Financial Conduct Authority. Tax rules can change, and their effect depends on your circumstances. The value of pensions and investments can fall as well as rise, and you may get back less than you put in.