Trusts & IHT Planning

Every one of our clients has a unique story behind their wealth but having built wealth many share similar core aims:

To grow or maintain (in real terms) the value of their assets.


To minimise tax both now and in the future.

Having worked hard to accumulate your capital it makes sense to preserve it as best you can. Life is full of decisions that often shape our future. Making the best possible decisions requires as much certainty as possible – the kind of certainty that comes from having access to good advice.

Every year HRMC receives billions of pounds from inheritance tax receipts. For the tax-year 2021-22 this stood at a record high of £6.1 billion and this is expected to rise further. A record 23,000 individuals were required to pay IHT during 2021-22, with a further 900 estates also liable. The average IHT bill was for £209,000.

Will you leave behind an inheritance tax bill?

Through the utilisation of cashflow modelling, your Financial Planner can forecast your future finances to estimate the amount of inheritance tax to pay when you die. If you know you will be leaving an inheritance tax bill, you can make advance provision to help mitigate the impact of this for your beneficiaries – whether this means spending more or gifting – or making use of financial planning tools such as trusts or IHT friendly investments.

Creating a cashflow model

Creating a cashflow model will involve talking details of your overall finances: your savings and investments; incomes and expenditures – and your plans and objectives for the future. Your financial planner will utilise the cashflow modelling software to analyse the information and create a long-term forecast of your future finances.

The model can be adapted to stress-test a range of different scenarios: The impact of different growth rates or stock market falls; spending more or gifting funds; the order of which you draw income or deplete your savings in retirement – or the any other potential ‘what if?’ scenario.

Avoiding an unwanted scenario

If you do leave behind an inheritance tax bill, your assets won’t be able to be distributed until the bill has been settled. This risks a catch 22 situation where the inheritance tax needs to be paid but the money from the estate isn’t accessible to pay for it. In such circumstances your executors may be in a situation where they need to find the cash to pay the bill themselves and this may cause a lot of stress at what is already a difficult time.

Reducing or managing an inheritance tax bill

There are several ways to mitigate – or even eliminate – an inheritance tax bill. Our Guide to Estate Planning & Preservation covers these in more detail, but in summary, these can include:


Making a Will


Gifting to your children or grandchildren


Taking out life insurance


Donating to charity


Business relief – through a business or qualifying investments


Putting assets into a trust

Seek professional guidance

Effective Inheritance Tax planning is a complicated area of financial planning and to safely tread the line between tax avoidance (which is illegal) and tax evasion (which is not), you would be best advised to consult a qualified Independent Financial Planner before making any arrangements.

At First Equitable we work diligently with our clients, helping them to navigate through the myriad of different options that exist to achieve positive outcomes for their, and their heirs, future financial security.

If you have a query regarding any aspect of Inheritance Tax planning and would like to receive some helpful advice in a language you can understand, please complete our contact form and an adviser will be in touch to discuss your needs.

You can also download our Guide to Estate Planning & Preservation by clicking here.

Take control of your financial future

Contact First Equitable today and take control of your financial future; together we will chart your journey towards achieving your goals and objectives.