- Assets in trusts pass outside of your estate for IHT purposes after seven years
- Some trusts enable you to retain control of the assets
- The costs of trusts mean it is not worth using them unless you have at least £100,000 to put into them
Inflationary growth of asset values while the inheritance tax (IHT) allowance has remained at £325,000 since 2009 means that increasing numbers of estates are liable for this tax, with receipts of £2bn between April and June 2023 – £200mn more than in the same period last year.
A key way to reduce your estate’s IHT liability is to make gifts to your intended beneficiaries while you are still alive. However, if you think you might still need access to that money or don’t want to pass control of the assets to the beneficiaries, trusts might be a good solution.