Inheritance Tax Planning for Yorkshire Individuals, Families and Businesses

IHT Planning That Acts Before It Is Too Late

Inheritance Tax (IHT) is charged on the value of an estate above the available nil-rate bands. With thresholds frozen since 2009 and rising asset values drawing more estates into the IHT net, a family home alone can now exceed the threshold in much of Yorkshire.

The October 2024 Budget made the most significant changes to IHT in a generation — particularly for farming families and business owners. The capping of Agricultural Property Relief and Business Property Relief, and the planned extension of IHT to pension pots from April 2027, represent a substantial shift that requires early, informed planning.

IHT planning is most effective when started early. Many strategies — lifetime gifting, trust planning, use of reliefs — require time to work. We advise individuals, families and business owners across Yorkshire on IHT planning, with a joined-up approach that considers the interaction with CGT and business succession.

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IHT Planning That Acts Before It Is Too Late

Farming or business assets affected by the Budget changes? Let's assess your position.

Why Clients Come to Us for IHT Advice

IHT planning conversations come to us in a variety of contexts. Common triggers include:

A family where the estate — including the family home — is likely to exceed the available nil-rate bands
A farming family concerned about the October 2024 Budget changes to Agricultural Property Relief, particularly where the farm or land value is significant
A business owner who has relied on Business Property Relief to exempt business assets from IHT and wants to understand the impact of the combined cap
An individual who wants to start making gifts to children or grandchildren and needs to understand the CGT and IHT implications of different gifting strategies
A couple who have not reviewed their wills or estate plan for many years and want to ensure their arrangements reflect both the current law and their current wishes
An executor dealing with an estate that may have an IHT liability and needing help with the HMRC inheritance tax return
A client with significant pension savings who wants to understand the impact of the planned April 2027 changes bringing pensions within the IHT net
A family with a holiday home, investment property or second property wanting to understand the IHT position on those assets

The earlier IHT planning starts, the more options are available. Some strategies require seven years to be fully effective. For agricultural and business clients, the Budget changes took effect in April 2026 — understanding the current position and the planning options that remain available is now the priority.

Not sure where your estate stands for IHT?

Our IHT Services

IHT Planning and Estate Reviews

We carry out IHT reviews for individuals and families to establish the likely IHT position of the estate, identify the reliefs and exemptions available, and advise on the planning options. A review covers the current estate value, the nil-rate bands available, any existing lifetime gifts within the seven-year window, and the IHT position under the current and forthcoming rules.

Where an estate has a significant IHT exposure, we develop a planning strategy that reflects the family’s priorities — which may include a combination of lifetime gifting, pension planning, trust arrangements, and insurance to meet any residual liability. We work alongside WDS Wealth Management where the planning involves financial products such as life assurance written in trust.

Agricultural Property Relief (APR)

Agricultural Property Relief (APR) has historically provided 100% IHT relief on qualifying agricultural property — farmland, farm buildings and farmhouses occupied for agricultural purposes. For farming families in North and West Yorkshire, this relief has been fundamental to succession planning.

The October 2024 Budget announced a significant change that took effect from April 2026: the combined value of assets qualifying for 100% APR and Business Property Relief (BPR) is now capped. Any qualifying value above the cap will attract relief at only 50%, giving a materially higher effective IHT rate on the excess. For farming families with land and buildings above the cap — which includes a significant proportion of Yorkshire farms given current land values — this represents a material change to the IHT position that requires an assessment of where the estate now stands and what options remain.

For current APR rates, the combined cap figure and the effective IHT rate above the cap, visit gov.uk/inheritance-tax or speak to our tax team. WDS has a substantial agricultural client base served from our Leyburn and Northallerton offices and advises on APR planning as a core part of our agricultural tax service.

Lifetime Gifting Strategies

Lifetime giving is one of the most straightforward ways to reduce an IHT estate, but it requires careful planning to be effective. Key gifting exemptions and rules include:

Annual exemption — each individual can give away a certain amount per year free of IHT. This can be carried forward one year if unused. For the current annual exemption visit gov.uk/inheritance-tax
Small gifts exemption — unlimited gifts of a small amount per recipient per year to any number of people
Normal expenditure out of income — regular gifts that are made from surplus income, form part of a normal pattern of giving, and do not affect the donor’s standard of living are fully exempt from IHT immediately. This is a powerful but under-used exemption
Potentially exempt transfers (PETs) — gifts to individuals that do not use a specific exemption are potentially exempt transfers. They become fully exempt from IHT if the donor survives seven years. If the donor dies within seven years, taper relief reduces the IHT chargeable on a sliding scale from years three to seven

Lifetime gifting also has CGT implications — a gift is a disposal at market value for CGT purposes, even though no money changes hands. The CGT and IHT implications of any significant gift need to be assessed together. See our CGT page for more detail on gift holdover relief.

Pension Planning and April 2027 Changes

Until April 2027, pension pots are generally outside the IHT estate on death. From April 2027, unspent defined contribution pension funds are planned to be brought within the scope of IHT. This is a significant change for anyone with substantial pension savings who has planned on the basis that their pension would fall outside the estate.

The planning implications include reviewing the balance between drawing from pension and other assets, the use of lifetime gifts funded from pension drawdown, and potentially accelerating gifts before April 2027 where the overall tax position supports this. We advise on the IHT implications of pension planning in conjunction with WDS Wealth Management.

⚠️ Pension IHT: the April 2027 implementation date should be verified with our tax team as the legislation may still be subject to change.

Why Choose WDS for IHT Planning

Agricultural expertise — WDS has a substantial agricultural client base across North Yorkshire and the Yorkshire Dales, served from our Leyburn and Northallerton offices. The October 2024 Budget changes to APR are our most pressing planning concern for farming clients and we have the expertise to advise on the options
Business succession — for business owners affected by the BPR cap, we advise on the planning options as part of a joined-up view of the business structure, tax position and succession plans
Connected to probate — WDS is ICAEW licensed to carry out non-contentious probate. Our IHT planning and probate services connect directly — we prepare the IHT return as part of the probate process and advise executors on the reliefs available to the estate
Connected to wealth management — for clients who use WDS Wealth Management, IHT planning involving life assurance, pension planning or investment-based strategies is coordinated between the tax and financial planning teams
Early planning focus — IHT planning is most effective with time. We encourage clients to start the conversation early rather than waiting until an estate review becomes urgent
Yorkshire based — six offices across Yorkshire. From our Leyburn and Northallerton offices we serve farming families across the Dales, the Vale of York and North Yorkshire. Our other offices serve business owners and individuals across West Yorkshire

Tailored Solutions

Our advisors take a personalised approach to Inheritance Tax planning, ensuring that strategies are tailored to your specific financial circumstances, family dynamics, and estate planning goals.

Tax Efficiency

Benefit from expert guidance on maximising available Inheritance Tax exemptions, reliefs, and allowances to minimise tax liabilities on your estate and preserve wealth for your beneficiaries.

Compliance Assurance

We help you navigate complex Inheritance Tax rules and regulations, ensuring compliance with HMRC requirements and minimising the risk of penalties or disputes related to estate taxation.

Peace of Mind

Our experienced team provides reassurance and peace of mind throughout the Inheritance Tax planning and estate administration process, guiding you every step of the way and addressing any concerns or questions you may have.

Long-Term Financial Planning

By implementing effective Inheritance Tax planning strategies, you can secure the financial future of your loved ones, protect family wealth across generations, and leave a lasting legacy for future generations.

Should I make a will as part of IHT planning?

Yes, a will is fundamental to IHT planning. Without a will, your estate is distributed according to the rules of intestacy, which may not reflect your wishes and may not make best use of available IHT exemptions. A well-drafted will ensures that the nil-rate bands of both spouses are fully utilised, that the residence nil-rate band is available where applicable, and that charitable legacies are structured to take advantage of the reduced IHT rate where appropriate. We coordinate IHT tax advice with solicitors on will planning.

What is Business Property Relief?

Business Property Relief provides IHT relief on qualifying business assets including shares in unquoted trading companies and business partnership interests. 100% BPR is available on most qualifying assets. From April 2026, the combined value qualifying for 100% BPR and Agricultural Property Relief is capped at one million pounds per estate. Business owners with significant unquoted shareholdings need to reassess their IHT planning in light of this change.

What is Agricultural Property Relief?

Agricultural Property Relief provides IHT relief on qualifying agricultural property including farmland, farm buildings and farmhouses occupied for agricultural purposes. Prior to April 2026, 100% APR is available on qualifying property meeting the ownership and occupation conditions. From April 2026, the combined value qualifying for 100% APR and Business Property Relief is capped at one million pounds per estate. WDS advises farming clients across Yorkshire, with particular expertise in our Leyburn and Northallerton offices.

Can I give my house to my children to avoid IHT?

Simply transferring your home to your children while continuing to live in it does not remove it from your estate for IHT purposes. HMRCs reservation of benefit rules mean that if you continue to benefit from an asset you have given away, it remains in your estate as if you still owned it. This is one of the most common IHT misconceptions. Gifts of property with full transfer of occupation can be effective, but the CGT implications also need to be considered simultaneously.

What is the seven-year rule?

The seven-year rule refers to the treatment of lifetime gifts to individuals, known as potentially exempt transfers. A gift to an individual becomes fully exempt from IHT if the donor survives seven years from the date of the gift. If the donor dies within seven years, the gift may be subject to IHT. Taper relief reduces the tax chargeable where death occurs between three and seven years after the gift. The full IHT rate applies to gifts made within three years of death.

Does my estate need to pay IHT?

Not all estates pay Inheritance Tax. Your estate will only have a liability if its total value, after deducting reliefs, exemptions and debts, exceeds the nil-rate bands available. Many estates, particularly where assets qualify for Agricultural or Business Property Relief, or where the estate passes largely to a surviving spouse, pay little or no IHT. We can give you a straightforward assessment of the likely IHT position of your estate.

How has the October 2024 Budget changed IHT?

The October 2024 Budget made several significant IHT changes. From April 2026, the combined value of assets qualifying for 100% Agricultural Property Relief and Business Property Relief is capped at one million pounds per estate. Value above this will attract relief at only 50%, giving an effective IHT rate of 20% on the excess. From April 2027, unspent defined contribution pension funds will be brought within the scope of IHT for the first time. These changes are particularly significant for farming families and business owners.

What is the IHT threshold?

The nil-rate band is the amount of an estate that is free from Inheritance Tax. There is also an additional residence nil-rate band available where a main home passes to direct descendants. For a married couple or civil partners, unused nil-rate bands from the first death can be transferred to the survivor. For current IHT thresholds visit gov.uk/inheritance-tax or speak to our tax team. Estates above the available threshold pay IHT at 40 per cent.