Chester · Cheshire · North Wales
Inheritance Tax Planning Chester
STEP-qualified advice on reducing your estate's IHT exposure — Chester-based, acting across Cheshire and North Wales.
Inheritance tax is payable at 40% on estates above the threshold. With careful planning — using nil-rate bands, lifetime gifting, trusts and reliefs — many families can significantly reduce or eliminate their IHT liability. Our Chester-based team includes Darren Steele, a STEP member since 2011 with specialist expertise in IHT planning.
Is Your Estate Exposed to Inheritance Tax?
Inheritance tax (IHT) is charged at 40% on the value of your estate above the nil-rate band. With rising property values across Chester and Cheshire, more families than ever are finding their estates above the threshold — often without realising it.
£325,000
Nil-rate band
Per person. Transferable between spouses.
£175,000
Residence nil-rate band
Where home passes to direct descendants.
Up to £1m
Combined allowance
For married couples / civil partners.
IHT Planning Strategies
There is no single solution to IHT planning — the right strategy depends on your assets, your family circumstances, and your priorities. Here are the main tools our Chester IHT solicitors use.
Using the nil-rate band and residence nil-rate band
Every individual has a nil-rate band (currently £325,000) on which no IHT is payable. Married couples and civil partners can transfer unused nil-rate band to the surviving spouse, potentially doubling the threshold. The residence nil-rate band (up to £175,000 per person) applies where a home is left to direct descendants.
Lifetime gifting
Gifts made more than seven years before death are generally exempt from IHT. Annual exemptions (£3,000 per year), small gifts exemptions, and gifts on marriage can reduce your estate's value over time. We can advise on a structured gifting programme that reduces IHT exposure without compromising your financial security.
Trusts
Trusts can remove assets from your estate for IHT purposes while retaining some control over how they are used. Discretionary trusts, life interest trusts and bare trusts each have different IHT implications. We can advise on the right trust structure for your circumstances.
Business Property Relief (BPR)
Business assets — including shares in qualifying companies and interests in business partnerships — may qualify for 100% or 50% relief from IHT. If you own a business, BPR can be one of the most significant IHT planning tools available.
Agricultural Property Relief (APR)
Agricultural property — including farmland, farm buildings and farmhouses — may qualify for 100% or 50% relief from IHT. Following the 2024 Budget changes to APR, careful planning is more important than ever for farmers and rural landowners.
Pension planning
Pensions are generally outside your estate for IHT purposes — making them one of the most tax-efficient assets to pass on. Following the 2024 Budget announcement that pensions will be brought within the IHT net from 2027, pension planning has become an increasingly important part of estate planning.
Charitable giving
Leaving 10% or more of your net estate to charity reduces the IHT rate on the remainder from 40% to 36%. Charitable legacies can therefore be structured to benefit both the charity and your family.
Case study: A simple will could save your family £140,000
Mark Henderson (67) and Sue Henderson (64). Home (joint tenants): £700,000. Savings: £250,000. ISAs: £150,000. Two adult children. Total estate: £1,100,000. Neither has updated their will.
❌ No will — intestacy applies
Home passed by survivorship — not by will — so RNRB cannot be claimed. £350,000 of combined RNRB entitlement simply lost.
IHT payable: £180,000
✓ Properly drafted wills — two steps
IHT payable: £40,000
Tax saved by proper wills
£140,000
From an estate of £1,100,000 — just by doing the paperwork correctly. A pair of wills costs a fraction of the tax saved.
Why the Residence Nil Rate Band is lost without a will
The RNRB (worth up to £175,000 per person) is only available where the home passes to direct descendants under a will. If the home passes by survivorship (joint tenancy) — as it does without a will — the RNRB cannot be claimed. For a married couple, this means up to £350,000 of combined RNRB entitlement is simply lost. Severing the joint tenancy and drafting the wills correctly unlocks all four allowances.
Three things every married couple must do
Sever the joint tenancy
Convert your home from joint tenancy to tenants in common. A quick deed — essential to unlock the RNRB and enable your share to pass under your will.
Write wills directing the home to children
Both wills must direct the home to children or grandchildren to claim both Residence NRBs. Without this, the RNRB is lost on the first death.
Let the NRBs transfer automatically
On first death, both the unused NRB and RNRB transfer automatically — but only with the right will structure. All four allowances unlocked by two straightforward steps.
Darren Steele
Senior Private Client Executive · STEP Member since 2011
Inheritance Tax Planning & TrustsDarren has worked in the legal sector since 1998 and has been a STEP member since 2011. He specialises in inheritance tax planning and complex estate structuring — advising clients across Chester, Cheshire and North Wales on reducing their estate's IHT exposure.
Frequently Asked Questions — IHT Planning Chester
How much inheritance tax will my estate pay?
IHT is payable at 40% on the value of your estate above the nil-rate band (£325,000) and residence nil-rate band (up to £175,000). Married couples and civil partners can combine their allowances, potentially sheltering up to £1 million from IHT. Use our free IHT calculator for an initial estimate, then speak to our team for personalised advice.
What is the 7-year rule for inheritance tax?
Gifts made more than seven years before death are generally exempt from IHT (potentially exempt transfers, or PETs). Gifts made within seven years of death may be subject to IHT on a sliding scale — 100% within three years, reducing to 0% after seven years (taper relief). Careful planning of the timing and nature of gifts can significantly reduce IHT exposure.
Can I put my house in trust to avoid inheritance tax?
Placing your home in trust can form part of an IHT planning strategy, but it is a complex area. Simply transferring your home into trust while continuing to live in it (a "gift with reservation of benefit") does not remove it from your estate for IHT purposes. We can advise on the circumstances in which a property trust is effective and appropriate.
What are the 2024 Budget changes to inheritance tax?
The October 2024 Budget announced significant changes to IHT, including bringing pension funds within the IHT net from April 2027, and changes to Agricultural Property Relief and Business Property Relief. These changes make IHT planning more important than ever. We can advise on how the changes affect your estate and what steps you can take now.
Do I need a STEP-qualified solicitor for IHT planning?
STEP (Society of Trust and Estate Practitioners) is the leading professional body for practitioners in the fields of trusts, estates and related taxes. A STEP-qualified adviser has demonstrated specialist knowledge in this area. Darren Steele at PDA Law has been a STEP member since 2011 and specialises in inheritance tax planning and complex estate structuring.
What is the residence nil-rate band and do I qualify?
The residence nil-rate band (RNRB) is an additional IHT allowance of up to £175,000 per person, available where a home is left to direct descendants (children, grandchildren, step-children). Combined with the standard nil-rate band, a married couple can potentially shelter up to £1 million from IHT. The RNRB is tapered for estates worth more than £2 million. We can advise on whether you qualify and how to maximise the allowance.
Can I give money away to reduce inheritance tax?
Yes — lifetime gifting is one of the most effective IHT planning strategies. You can give away up to £3,000 per year free of IHT (the annual exemption), plus small gifts of up to £250 per person, gifts on marriage, and regular gifts from income. Larger gifts (potentially exempt transfers) are exempt from IHT if you survive seven years after making them. We can advise on a structured gifting programme that reduces IHT exposure without compromising your financial security.
Does business property qualify for inheritance tax relief?
Business Property Relief (BPR) can provide 100% or 50% relief from IHT on qualifying business assets — including shares in unquoted companies, interests in business partnerships, and certain business property. Following the 2024 Budget changes, BPR is now capped at £1 million at 100% relief, with a 50% rate applying above that threshold. If you own a business, BPR planning is an important part of your estate planning strategy.
What is the difference between inheritance tax and capital gains tax on death?
Inheritance tax is charged on the value of your estate at death, at 40% above the threshold. Capital gains tax is not charged on death — assets pass to beneficiaries at their market value at the date of death (a "CGT-free uplift"), which resets the base cost for future disposals. However, if assets are sold during the administration of the estate, CGT may be payable on gains arising after the date of death. We advise on both taxes as part of our estate planning service.
Can a charitable legacy reduce my inheritance tax bill?
Yes. If you leave 10% or more of your net estate to charity, the IHT rate on the remainder of your estate is reduced from 40% to 36%. This means a charitable legacy can be structured so that both the charity and your family benefit — the charity receives a legacy, and your family pays less IHT. We can advise on how to structure a charitable legacy in your will.
Related reading
How Married Couples Can Save £140,000 in Inheritance Tax
The Henderson case study — how two straightforward steps saved £140,000 in IHT on the same estate.
Read the full articleDiscuss Your IHT Planning
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