Inheritance tax: what it is, and how you could beat it

Not many people realise this: you don’t have to be super-rich to be caught by inheritance tax (IHT).

Generally, 40% IHT could kick in once your estate is worth over £325,000 (your estate includes your home, savings, investments and also your ISA). There are various allowances, so a married couple could potentially leave £1 million IHT free. But where allowances other than the standard nil-rate band don’t apply, a £1 million estate could attract an IHT bill of up to £270,000. 

To put this in perspective, HMRC collected a record £5.5 billion in IHT in 2021/22 (to February 2022). With the five-year freeze on inheritance tax nil-rate bands announced in the March 2021 Budget, IHT receipts are forecast to reach an all-time high of £6.6 billion by 2026, with the number of estates liable for the tax set to double.

That said, there are ways to start to mitigate – even completely eliminate – IHT liabilities.

In this section, you will find a host of free resources that explain how IHT works and what you could do to mitigate it, as well as information on investment opportunities that experienced investors are increasingly using to pass on more of their wealth. 

Please remember, the opportunities covered in these pages are high risk and you could lose the amount you invest. Tax rules can change and benefits depend on circumstances.

Free inheritance tax planning resources

Guides

The basics of inheritance tax, and strategies to mitigate it, explained concisely in plain English in a free to download PDF

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How can you beat Inheritance Tax? How can you pass on more to your loved ones? Download your free guide to find out.

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Did you know that when you die the taxman could take 40% of your ISA in Inheritance Tax? How could you avoid that? Download our free report.

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Investing in assets that qualify for Business Property Relief (BPR) could help mitigate IHT. Find out how in this concise factsheet.

Articles

From an introduction to current rules to answers to common questions – read about inheritance tax

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Featured offers

Our favourite current opportunities: investments we think have genuine merit, whose managers we believe can deliver returns to investors. Read more.

IHT

  • Octopus Inheritance Tax Service

    Investors will gain exposure to Fern Trading Limited, a large unquoted company with trading subsidiaries in a number of sectors. Read more and apply online.

    Read more about Octopus Inheritance Tax Service
    Sector
    Property & renewables
    Portfolio size
    £2.6 billion
    Initial charge
    3.5%
    Saving via Wealth Club
    -
    Net initial charge
    3.5%
    AMC
    1.5%

AIM ISA

  • Octopus AIM IHT ISA

    Octopus's AIM Inheritance Tax portfolio is the largest service of its kind. It focuses on large and established companies. Read our review and apply online...

    Read more about Octopus AIM IHT ISA
    Portfolio size
    £2.6 billion
    Average market cap
    £846 million
    Initial charge
    1.0%
    Saving via Wealth Club
    0.25%
    Net initial charge
    0.75%
    AMC
    2.0%
  • Stellar AIM IHT ISA

    Stellar AIM ISA Inheritance Tax Service, now managed in-house under Stephen English, focuses on smaller AIM companies. Read our review and apply online.

    Read more about Stellar AIM IHT ISA
    Portfolio size
    £87.5 million
    Average market cap
    £407 million
    Initial charge
    2.0%
    Saving via Wealth Club
    2.0%
    Net initial charge
    -
    AMC
    1.5%
  • RC Brown AIM IHT ISA

    A relatively new and small portfolio from an established investment management boutique focusing on primary market opportunities (i.e. new share issues).

    Read more about RC Brown AIM IHT ISA
    Portfolio size
    £33.3 million
    Average market cap
    £625.8 million
    Initial charge
    Nil
    Saving via Wealth Club
    -
    Net initial charge
    -
    AMC
    1.25%