How to Protect a £2M+ Estate from Inheritance Tax
- Ray Best
- Dec 11, 2025
- 2 min read
Strategic Planning Now Can Save Your Family Millions Later
Inheritance Tax (IHT) is often called a "voluntary tax," because with the right structures in place, much of it can be avoided. For families with estates valued at over £2 million, this isn't just a financial decision—it's a strategic one.
Understanding Inheritance Tax
Inheritance Tax is typically charged at 40% on the value of your estate above the nil-rate band (£325,000 per person, plus a possible residence nil-rate band of up to £175,000).
But for estates exceeding £2 million, taper relief can erode the residence allowance, potentially wiping out £175,000 of tax-free benefit. What's more, while Business and Agricultural Relief may apply, they require careful structuring to be effective.
Key Strategies to Reduce Your IHT Liability
Use Trusts Strategically
Trusts can remove assets from your taxable estate while still offering control or benefit to your family. Discretionary, family, or interest-in-possession trusts can each serve a unique role in structuring wealth securely and efficiently.
Plan Lifetime Gifting Thoughtfully
Gifts made more than 7 years before death are usually IHT-free. But timing and documentation are crucial; ad hoc gifting may not yield the protection your estate needs.
Structured, international gifting is key.
Life Insurance Written in Trust
A life insurance policy held in trust can provide immediate liquidity to cover any IHT bill, without increasing the value of your taxable estate.
Create Clear Family Agreements
Family agreements define how wealth is passed on, who controls it, and under what terms. These legal documents reduce the risk of disputes and allow for smoother, more tax-efficient succession.
Why Early Planning Matters
For high-value estates, every year without a plan increases exposure. The sooner you act, the more options you have, and the more control you retain. The difference between delaying and preparing can amount to millions in savings.
At Future Family Inheritance Ltd., we specialise in helping families like yours plan for the future. We design our bespoke strategies not only to reduce tax but also to preserve the legacy you've built over a lifetime.
Real Results: How We Helped a Property Investor Secure His £2.4M Estate
Discover how our bespoke inheritance tax strategy helped a high-net-worth property investor reduce tax exposure and preserve wealth for future generations.
Your Private Hub
Our secure client portal gives you access to the latest developments in estate planning, inheritance tax strategies, and wealth protection. Inside, you'll find expert-written guides, timely updates, and resources designed to help you make confident, informed decisions about your estate.
Whether you're reviewing your current plan or preparing for the future, our portal ensures you stay one step ahead, with clarity, convenience, and complete discretion.
Comments