Your guide to UK inheritance tax and trusts 8 The main approach to inheritance tax (IHT) mitigation is to reduce the value of your estate over a number of years. The smaller your estate when you die, the less your IHT bill is likely to be. There are many approaches to reducing your IHT liability, such as those outlined below. Some are more complex than others and some may not be suitable for you, so it is always important to get professional financial advice. The tax rate for an individual’s IHT on death will be reduced from 40% to 36% if they have left at least 10% of their estate to charity in their will – this was introduced in the UK Budget in 2011 to encourage gifting to charities on death to become the ‘norm’. Ensure assets are individually owned at least up to nil-rate band values Utilise any unused nil-rate and residence nil-rate bands from deceased spouse or civil partner Own assets which are not liable to IHT Give cash gifts to family members and use exemptions Utilise potentially exempt transfers Write a will Consider an equity release plan or creating a debt on the estate Write your life assurance policy/policies into trust Put gifts in trust for beneficiaries Will gifts to charities, museums and political parties How can I reduce my IHT bill? Ways to reduce your IHT bill Many of the solutions above are outlined on the following pages. For specific information on Quilter’s IHT solutions, please speak to your financial adviser.