Inheritance Tax Specialists in London
Let’s be honest: inheritance tax (IHT) can feel like a storm cloud hanging over your family’s financial future. With rates as high as 40% on estates above the £325,000 threshold, even well-planned legacies can take a hit if you’re not prepared. Families often spend years building wealth—only to see a chunk of it vanish due to overlooked tax rules or missed planning opportunities. At Pearl Lemon Accountants, we’re inheritance tax specialists in London, and we’re here to help you navigate this complex landscape. Whether you’re planning ahead to protect your children’s future or dealing with an unexpected tax bill after losing a loved one, our team ensures your hard-earned assets stay where they belong—in your family’s hands.
London Inheritance Tax Specialists
Inheritance tax planning isn’t just about the future—it’s about making the right financial moves today. At Pearl Lemon Accountants, we provide expert inheritance tax planning services to help you minimize tax liabilities, protect your assets, and ensure compliance with HMRC regulations.
- Reduce Tax Exposure: We apply reliefs like Business Property Relief (BPR) and strategic gifting to lower your tax burden.
- Avoid HMRC Penalties: Our tax specialists ensure proper reporting to prevent costly fines and investigations.
- Protect Family Wealth: We structure estates to preserve properties, investments, and businesses from excessive taxation.
- Efficient Estate Distribution: Our planning ensures a smooth probate process, preventing disputes and unexpected tax liabilities.
Let our London inheritance tax specialists handle the complexities while you focus on what matters most.
Our Expert Inheritance Tax Services
We don’t just crunch numbers—we build customized strategies to protect your legacy. Here’s how we help:
Estate Valuation and IHT Forecasting
Before you can plan, you need to know where you stand. Many clients are shocked to learn their estate’s true value once pensions, overseas assets, or even vintage wine collections are factored in. We’ll:
- Calculate the current value of your estate, including properties, investments, and personal assets like art, jewelry, or digital assets (e.g., cryptocurrency).
- Forecast potential IHT liabilities based on your assets and existing reliefs, modeling scenarios like property price fluctuations or changes in marital status.
- Identify “hidden” liabilities, like overseas assets subject to double taxation or lifetime gifts that could trigger a tax charge if you pass away within 7 years.
Trust Structuring and Administration
Trusts are a cornerstone of IHT planning, but choosing the wrong type can backfire. A discretionary trust offers flexibility but comes with a 20% entry charge. A bare trust is simpler but gives beneficiaries immediate access—which might not align with your goals. We specialise in:
- Setting up discretionary trusts, life interest trusts, and bare trusts to ring-fence assets. For instance, a life interest trust lets your spouse live in the family home tax-free, with the property passing to your children afterward.
- Advising on the IHT implications of trust contributions, including 10-year anniversary charges (6% of the trust’s value) and exit charges.
- Handling trust registration with HMRC’s Trust Registration Service (TRS) and filing annual tax returns to keep everything above board.
Business and Agricultural Property Relief (BPR/APR)
Own a business or farmland? These reliefs can reduce IHT by up to 100%, but HMRC rejects nearly 90% of BPR claims due to technical errors. We’ll:
- Assess eligibility for BPR/APR, including qualifying assets (e.g., unlisted shares, agricultural land) and holding periods (2+ years for BPR, 7+ for APR).
- Structure ownership to maximise relief. Example: Transferring shares to a family member before selling the business ensures the sale proceeds stay IHT-free.
- Advise on pitfalls, like “mainly investment” businesses (e.g., rental portfolios) that don’t qualify. Even a small trading component can tip the scales—we’ll help you prove it.
Lifetime Gifting Strategies
Gifting assets while you’re alive can slash IHT, but the rules are strict. A £50,000 gift to your child today could save £20,000 in IHT—if you survive 7 years. We’ll help you:
- Use annual exemptions (£3,000/year) and small gift allowances (£250/person). Combine these to gift £3,250 tax-free to a family member annually.
- Plan Potentially Exempt Transfers (PETs) that fall out of your estate after 7 years. For larger gifts, we’ll map tapered relief rates (8% yearly reduction after year 3) to minimize risk.
- Navigate the “7-year rule” with insurance policies (e.g., decreasing term assurance) to cover unexpected tax bills if you pass away prematurely.
Cross-Border IHT Planning
International assets? The UK’s “domicile” rules can get messy. A UK-domiciled expat with a Spanish villa still pays IHT on it, while non-doms only pay on UK assets. We’ll:
- Mitigate double taxation using the UK’s network of inheritance tax treaties (e.g., with the US or France).
- Advise on excluded property trusts for non-UK assets, shielding them from IHT even if you’re domiciled here.
- Handle reporting for overseas properties, bank accounts, or investments, ensuring compliance with HMRC’s strict disclosure rules.
HMRC Compliance and Dispute Resolution
HMRC is cracking down on IHT errors, with investigations rising by 21% last year. Common triggers include undervalued properties and undisclosed gifts. We’ll:
- Prepare IHT400 forms and ensure full disclosure of lifetime gifts, trusts, and jointly owned assets. Missing a single gift over £3,000 can delay probate.
- Defend against HMRC enquiries, from simple queries about valuations to full-scale investigations. We’ll handle negotiations, providing evidence like property surveys or bank records.
- Negotiate payment plans for unexpected tax bills using instalment options. For example, spreading IHT on property over 10 years at 2.6% interest.
Inheritance Tax Statistics You Should Know
- £7.5 billion – HMRC’s IHT receipts for 2023/24, up 12% year-on-year. This surge reflects rising property prices and tighter enforcement.
- 1 in 20 – Estates that paid IHT in 2023, with the average bill hitting £234,000. Estates over £2m paid an average of £430,000.
- 90% – Business Property Relief claims rejected due to ineligible assets (HMRC, 2022). Most failures involved rental properties or inactive companies.
- £2.3 billion – Value of Potentially Exempt Transfers (PETs) reported in 2023, with 15% triggering tapered relief due to deaths within 3-7 years.
- 40% – Estates with international assets facing prolonged probate (6+ months) due to IHT disputes over jurisdiction or valuation.
Ready to Tackle Inheritance Tax Head-On?
Don’t let the taxman take a bigger slice of your legacy than necessary. At Pearl Lemon Accountants, we’ve helped hundreds of families in London protect their estates with smart, practical IHT planning. From restructuring family businesses to setting up bulletproof trusts, we turn tax headaches into opportunities for growth.
Let’s start the conversation today. Share your goals, and we’ll craft a plan that keeps your family’s future secure. The sooner you act, the more options you’ll have—like using lifetime gifts to shrink your taxable estate year by year.
Frequently Asked Questions
The nil-rate band is £325,000 per person. If you’re married or in a civil partnership, you can transfer any unused allowance to your spouse, effectively doubling it to £650,000. Example: If your spouse left everything to you tax-free, your estate can now pass £650,000 IHT-free to heirs.
If you gift your home but keep living there rent-free, HMRC may class it as a “gift with reservation” (GWR), meaning it stays in your estate. We’ll structure it legally—like paying market rent to your kids or using a trust that lets you reside there as a beneficiary.
BPR can reduce IHT by 50% or 100% on qualifying business assets (e.g., shares in unlisted companies). The business must be trading (not mainly investment) and held for at least two years. Example: A café with a small rental flat attached might still qualify if over 50% of income is from trading.
PETs become taxable on a sliding scale. If you die within 3 years, 40% IHT applies. Between 3-7 years, tapered relief reduces the rate (e.g., 32% at 4 years, 24% at 5). We’ll model these scenarios so your family isn’t blindsided.
If you’re UK-domiciled, yes—IHT applies to worldwide assets. Non-doms only pay IHT on UK assets, but domicile status is complex. Example: A French citizen living in London for 20 years may still be deemed UK-domiciled if they’ve cut ties with France.
