More of us than ever before are liable to give up almost half (40%) of our estate to the taxman.

Ok, so you won't actually pay IHT when you die. But your nearest - and presumably dearest - will have to pay it. And they won't thank you very much for feckless financial planning.

IHT planning is also about planning life, after your death. Proper planning will save you time, and it will make it easier for those who survive you to benefit from your estate.

IHT affects YOU!

IHT affects everyone, directly or indirectly. Knowing your IHT rights, and planning against wrongs, simply makes good sense and will save you money.

There is little that is more undignified than families rowing over who has the rights to your record collection, sports car and savings account!

This is just one reason why you need to start understanding IHT now.

Soon you'll be able to make more of an inheritance, whether you're passing it onto relatives, or receiving it from them.

IHT issues throw up numerous questions:

• Do you just give your house to your kids, or use a Trust? If so, what kind of Trust?
• How much can you give to your children in your lifetime without paying tax?
• Can you give your kids an income without paying IHT?
• How much do you have to pay to pass your business on?
• How do insurance policies help you plan against IHT?
• Can you avoid IHT altogether?

You can do a lot for yourself, and therefore save your accountant and solictor's time for the detailed and more complicated stuff.


Before you can begin planning your estate, or helping someone else with their's, you need to know the IHT fundamentals.

• Where inheritance came from
• What inheritance tax is
• Where inheritance tax applies

The history of IHT - in three paragraphs

In the UK, death taxes have been turning folk in their graves in some form or other since 1796.

Modern inheritance tax was introduced in 1986, and it replaced the old capital transfer tax. The 1986 version of IHT included some new twists on the old tax, the most important being the removal of liability for tax on certain transfers of funds between one person and another.

At a formidable basic rate of 40%, it's no surprise that IHT is big business for the Government. In fact, it pulls in almost £3 billion a year.

One of the reasons that figure is so high is undoubtedly because there is so little decent IHT advice around. Perhaps this is a new definition of a stealth tax!

Thousands of us are still making poor decisions when planning our estates.

The IHT allowances are revised every April.