Inheritance Tax in 2026: 15 Practical Ways to Plan Ahead

Inheritance Tax has become part of everyday conversations for many families. Frozen allowances and rising property values mean more people are reaching the threshold than in previous years, often without realising. Many are simply homeowners wanting to understand what the rules mean and how to plan sensibly.

Good planning doesn’t need to be complicated. It’s usually a series of small, thoughtful decisions that give families clarity and help reduce unnecessary costs or stress later on. Below is a clear, straightforward overview of 15 practical ways to reduce a future Inheritance Tax bill in 2026 and beyond.

A helpful starting point

The current individual allowances remain:

1. £325,000 general inheritance tax allowance
2. £175,000 residence allowance when leaving a main home to direct descendants

These figures are frozen until 2031, so as property values shift, it’s increasingly common for estates to become taxable unexpectedly.

Planning early gives people freedom and time, whether they’re thinking about children, wider family, friends, or charities they’d like to support.

15 practical ways to reduce a future Inheritance Tax bill

These are well‑established tools used by families across the UK. Not all will apply to everyone, but together they offer a helpful picture of what’s possible.

1. Transfers to a spouse or civil partner Transfers between spouses or civil partners are usually free of inheritance tax.
2. Using unused allowances A surviving partner can often claim any unused portion of their spouse’s allowances.
3. Making use of the Residence Nil Rate Band Leaving the family home to children or grandchildren can increase how much passes free of tax.
4. Using the £3,000 annual gift allowance Up to £3,000 can be given away each tax year without affecting the estate.
5. Small gifts of up to £250 These can be made to multiple people each year, provided they don’t overlap with other exemptions.
6. Wedding and civil partnership gifts Different allowances apply depending on your relationship to the couple.
7. Regular gifts from surplus income If you have a genuine surplus, regular gifts may fall immediately outside your estate — good record‑keeping is essential.
8. Larger gifts and the seven‑year rule Larger gifts may fall outside your estate after seven years.
9. Life insurance written into trust This doesn’t reduce tax but can provide funds to cover a future liability.
10. Reviewing pension nominations Pensions often sit outside the taxable estate; keeping nominations up to date is important.
11. Trusts where suitable Helpful for protecting beneficiaries, blended families, or long‑term arrangements.
12. Business or Agricultural Relief These can reduce or eliminate inheritance tax on qualifying assets.
13. How property is owned Owning as tenants in common (rather than joint tenants) can support certain planning choices in a Will.
14. Deeds of Variation Beneficiaries may be able to adjust how an estate is distributed within two years of a death.
15. Charitable gifts Leaving 10% or more of the taxable estate to charity can reduce the inheritance tax rate on the rest.

This can be a thoughtful way, particularly for people without children or with more varied beneficiaries, to pass more to the people and causes that matter most.

A grounded, practical approach

Everyone’s circumstances are different. Some people prioritise children or grandchildren; others want to ensure friends, siblings, nieces or nephews are supported. Many wish to combine this with meaningful gifts to charity.

Whatever your priorities, the message is the same: a little planning goes a long way. Because the rules have many conditions and exceptions, tailored advice is essential to avoid unintended consequences.

There’s no one‑size‑fits‑all route -  the best plan is the one that fits your life, your wishes and your priorities.

If you’d like clarity on your own situation, we can help

If you would like to put a clear plan in place, or want to understand how these Inheritance Tax planning options apply to their own circumstances, please contact Solomons Solicitors on 01202 802 807 to arrange an appointment with one of the firm’s expert solicitors. Alexandra Livesey, Paul Solomons and the wider team can help review Wills, explore straightforward planning steps and ensure everything is set out properly for family, friends or chosen beneficiaries.