Harrogate & North Yorkshire
From our office at Haggs Farm, Follifoot: Harrogate, Knaresborough, Wetherby, Ripon, Otley, Ilkley, Tadcaster, Nidderdale and north Leeds.
Inheritance tax planning
Pass on more of what you’ve built. Clear advice on gifting, trusts, pensions and business relief, with the changes coming in April 2027 built in.
How inheritance tax works
Inheritance tax is charged at 40% on the part of your estate above the allowances available when you die. Everything you leave to a spouse, civil partner or charity is exempt, and married couples and civil partners can pass unused allowances to each other.
The allowances have been frozen since 2020/21 and will stay frozen until 5 April 2031, while house prices and investments have kept rising. On top of that, from 6 April 2027 most unused pension funds will count towards your estate. More families will be affected every year.
| 2026/27 | Amount |
|---|---|
| Nil-rate band (fixed until 5 April 2031) | £325,000 |
| Residence nil-rate band (fixed until 5 April 2031) | £175,000 |
| Residence nil-rate band taper starts | £2,000,000 |
| Inheritance tax rate above the allowances | 40% |
| Reduced rate if 10% or more of the net estate goes to charity | 36% |
| 100% agricultural and business relief allowance, per person | £2,500,000 |
| Annual gift exemption (one year can be carried forward) | £3,000 |
| Small gifts exemption, per recipient | £250 |
Sources: HMRC. The residence nil-rate band applies when a home passes to direct descendants, and reduces by £1 for every £2 the estate is worth above £2 million.
Inheritance tax calculator
A first look at the bill under today’s rules and the April 2027 rules. Change the figures and it updates as you type.
Six ways we reduce the bill
- Gifting during your lifetime. Annual exemptions, regular gifts from surplus income (exempt straight away) and larger gifts that fall out of the estate after seven years.
- Spending in the right order. With pensions joining the estate from 2027, the old rule of spending savings first and leaving pensions untouched needs re-testing.
- Trusts. Keeping control while moving growth outside the estate, or protecting money for children and grandchildren.
- Business and agricultural relief. 100% relief on the first £2.5 million per person from April 2026, 50% above. Shares in some unlisted trading companies can qualify after two years; AIM shares now get 50%.
- Life cover written in trust. A policy that pays the tax bill so your family doesn’t have to sell the house or the business to fund it.
- Charitable giving. Leave 10% or more of your net estate to charity and the rate on the rest falls from 40% to 36%.
Some of these tools carry investment risk or lock money away. We’ll only recommend what suits your circumstances and attitude to risk.
Farms and family businesses
Since 6 April 2026, 100% agricultural and business property relief applies to the first £2.5 million of qualifying assets per person. Above that, relief is 50%, an effective tax rate of 20%.
Unused allowance passes to a surviving spouse or civil partner, so a couple can pass on up to £5 million of qualifying assets with full relief, on top of their nil-rate bands. Tax on qualifying assets above the allowance can be paid in ten annual instalments, interest-free.
That still protects many family farms and businesses around Ripon, Nidderdale, Tarleton and the West Lancashire plain, but not all of them, and wills written before 2026 may not make the most of the new allowance.
What’s changing, and when
Five dates that shape pension and inheritance tax planning between now and 2031.
Farm and business relief capped
100% agricultural and business relief now applies to the first £2.5 million of qualifying assets per person (transferable between spouses). Above that, relief is 50%.
Pensions enter the estate
Most unused pension funds and death benefits count towards inheritance tax for deaths on or after this date. Death-in-service benefits are excluded.
Minimum pension age rises to 57
The earliest age most people can take money from a personal pension moves from 55 to 57. The State Pension age is also reaching 67 by 2028.
Salary sacrifice capped
Only the first £2,000 a year of pension contributions made by salary sacrifice will stay free of National Insurance.
Allowance freeze ends
The £325,000 nil-rate band, £175,000 residence nil-rate band and £2.5 million relief allowance are fixed until this date.
Inheritance tax planning near you
Two offices, each covering about 15 miles around it, and video for everywhere else.
Birkdale, Southport & West Lancashire
From our Birkdale office: Southport, Ainsdale, Formby, Crosby, Maghull, Ormskirk, Burscough, Skelmersdale, Tarleton, Leyland and Lytham St Annes.
My wife and I first contacted Chris at Seventy some 10 years ago. We were very impressed with him and the advice we were given, and have been ever since. It is good to know that our finances are being taken care of by such a competent adviser and I would recommend Chris’s services to anyone.
The team at Seventy Financial Planning have provided my wife and I with invaluable expert advice and support over a number of years. Their services are very professional and first class. I would not hesitate to recommend them to anyone seeking independent financial advice.
Seventy brought real clarity to my personal situation, highlighting areas that need attention and which were performing well. I appreciated the genuine desire to understand my personal situation. The unhurried and professional approach made Seventy a pleasure to work with.
I have enlisted the help of two leading members of Seventy Financial Planning over the past few years – Chris Riley and Andrew Brierley. Both have been fantastic and relaxed in their friendly Yorkshire manner! In fact all of the team at Seventy are great. Highly recommended.
Seventy has been a real lifesaver for us. Our investments with a previous firm were rapidly depleting. This would have resulted in severe difficulties for us. Seventy stabilised and grew our investments. That this was achieved in the difficult markets we are seeing is impressive.
Chris from Seventy sat with me and assessed my needs and how risk averse I am. He then provided me with a full review of findings and investment options. I am now in a better financial position than I would have been without his advice and I have been able to take early retirement.
Inheritance tax: your questions
How much can I leave before paying inheritance tax?
Everyone has a £325,000 nil-rate band, plus up to £175,000 residence nil-rate band if your home goes to children or grandchildren. A married couple or civil partners can combine theirs, so up to £1 million can usually pass free of inheritance tax.
Are pensions subject to inheritance tax?
For deaths on or after 6 April 2027, most unused pension funds and death benefits are included in the estate. Pensions left to a spouse, civil partner or charity stay exempt, and death-in-service benefits are excluded. Your personal representatives will report and pay any tax due.
What is the seven-year rule?
Gifts to people are potentially exempt: if you live seven years after making them, they fall outside your estate. If you die sooner, they use up your nil-rate band first, and taper relief can reduce the tax on gifts made three to seven years before death.
Can I give money to my children each year tax-free?
Yes. You can give £3,000 a year in total (plus last year’s if unused), £250 to any number of other people, and wedding gifts of up to £5,000 to a child. Regular gifts from surplus income can be exempt with no limit, if they don’t reduce your standard of living.
Is inheritance tax planning regulated?
The Financial Conduct Authority does not regulate tax or estate planning, trusts or will writing. The investment and pension advice that often forms part of a plan is regulated, and we are authorised and regulated by the FCA (number 756248).
Let’s chat
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Let’s arrange a free, no-obligation call with one of our advisers.
Fill in the form and we’ll be in touch, or simply call us on 01423 611004.
HarrogateHaggs Road, Follifoot, Harrogate, North Yorkshire
BirkdaleBirkdale, Southport, Merseyside