How much inheritance tax will your nearest and dearest have to pay when you pass away? At Ascent Financial Planning, our experts deal with inheritance tax planning in north Wales and can show you how to reduce the bill.
What are the current inheritance tax (IHT) thresholds?
When you pass away, your estate will be subject to inheritance tax. However, there’s no IHT to pay if your estate is valued below a £325,000 threshold. This is called the Nil Rate Band (NRB). Every individual has a nil rate band. If your estate is worth over £325,000, IHT is charged at 40% on the excess amount.
An additional allowance, the Residence Nil Rate Band (RNRB), may apply if you are passing your main home to your children or grandchildren. Set at £175,000, the RNRB can increase the total tax free threshold to £500,000.
How to estimate a potential IHT bill
To estimate your IHT bill, you need to:
- Estimate the gross estate value, including savings, property, assets, possessions and investments.
- Deduct liabilities, for example, debts, funeral costs and administration fees.
- With the value you have left, apply the NRB and RNRB
- Apply reliefs if relevant.
- You can now calculate the taxable amount (the value above thresholds) and apply the 40% tax rate.
What assets are included in an estate:
An estate can include a variety of assets such as:
- Property
- Investments and money
- Possessions: vehicles, jewellery, art, antiques and collectibles
- Gifts made within seven years of your death
How to reduce inheritance tax
- Gifts: One way to reduce inheritance tax in north Wales is to give your money away during your lifetime. No tax is due on any gifts you give as long as you live for seven years after you give it. Each tax year, you can give up to £3,000 of gifts, split however you like. You can also make unlimited gifts of up to £250, as long as you haven’t used another allowance for the recipients. In addition, gifts made in connection with a wedding or civil partnership may also be exempt from Inheritance Tax. You can give up to £5,000 to your child, £2,500 to your grandchild or great-grandchild, and £1,000 to anyone else, provided the gift is made on or shortly before the ceremony.
- Leave money to charity: If at least 10% of the net value of your estate is left to charity, the IHT rate on the taxable estate can be reduced to 36%.
- Leave your estate to your spouse: Your spouse or civil partner will never have to pay tax on assets you leave them, no matter the amount. When you pass away, your spouse will inherit your unused IHT allowance. This can also include the £175,000 main residence allowance, meaning they can inherit up to £500,000 of unused IHT allowance. This means that where married couples jointly own a family home and want to leave it to their children, the total IHT exemption will be £1m. This is especially important for families across North Wales where property values have risen significantly.
When to seek professional advice
In 2025/2026, inheritance tax (IHT) receipts hit a record high as families parted with £8.5 billion. At Ascent Financial Planning in St Asaph, we are helping families across North Wales take action. Book a consultation with one of our experienced advisers today and let us help you protect your family’s future with clear inheritance tax planning in North Wales.
Inheritance Tax Planning is not regulated by the Financial Conduct Authority.
Certain business assets and agricultural property can qualify for IHT relief.
