Will the taxman take part of your house?
For most families, the home is the asset that tips them over the threshold. It's also the one nobody wants to touch. Here's how to find out where you stand — and what can actually be done about it.
Eleven questions, about five minutes. No cost, no phone call, no obligation.
Most estates pay nothing.
A married couple who own their home and leave it to their children can usually pass on up to £1 million with no inheritance tax at all. If that's your position and your estate sits comfortably below it, you may need a will and Lasting Powers of Attorney — and not much else.
We'd rather tell you that than sell you a trust you don't need.
But four things push families over, and three of them are getting worse.
Two allowances, and the second one has conditions
The nil-rate band — £325,000 per person
The first £325,000 of your estate is taxed at nothing. This figure has been frozen since 2009 and, following the November 2025 Budget, is now frozen until April 2031.
The residence nil-rate band — up to £175,000 per person
An additional allowance, but only when your home passes to direct descendants: children, stepchildren, adopted children, grandchildren. Not nieces, nephews or siblings.
Together, that's up to £500,000 for one person and £1 million for a married couple, because unused allowance transfers to a surviving spouse. Everything above the available allowances is taxed at 40%.
The four things that push families over
- 01Your estate is worth more than £2 million
Above that point the residence allowance is withdrawn — reduced by £1 for every £2 over the threshold. A large enough estate loses it entirely, which can cost a couple £350,000 of allowance.
- 02You aren't married, or you have no direct descendants
Unmarried partners cannot transfer allowances to each other, however long they've been together. And if your home isn't passing to children or grandchildren, the residence allowance doesn't apply at all.
- 03Your pension is about to count
From April 2027, the government plans to bring most unused pension pots into the scope of inheritance tax for the first time. For a couple with defined contribution pensions, this can move an estate from comfortably under the threshold to well over it, without anything about their circumstances changing.
- 04You own more than one property
A second home, a holiday let or a buy-to-let is counted in full, and only your main residence qualifies for the residence allowance.
Alan and Sue, both 68, married, two adult children
Their combined allowances come to £1 million, because their home passes to their children. Today, their pensions sit outside the estate and there is no inheritance tax to pay.
From April 2027, on current plans, the bill is £124,000. The pensions are counted. £310,000 falls above the allowances, and the bill is payable by their children before they inherit — within six months of the end of the month of death.
Nothing about Alan and Sue's life has changed. Only the rules have.
Their estate
What can actually be done
Six levers. Which of them apply to you depends entirely on your circumstances, and some of them close with age.
How you own your home
Most couples own as joint tenants without ever having chosen to. Changing to tenants in common, with the right will structure behind it, can protect a share of the property. Often the single most effective step available, and one of the least disruptive.
Property ownership →Trusts
A trust moves assets out of your personal estate and places them with trustees you choose, on terms you set. It's how an inheritance survives divorce, creditors, care costs and the next generation's decisions.
Trusts →Lifetime gifting
Gifts fall out of your estate entirely after seven years, with a taper between three and seven. There are annual exemptions, and gifts out of normal income can be exempt immediately. The lever most reliant on starting early.
Gifting strategy →Pension and life cover structures
Written correctly, life cover can sit outside your estate and provide your family with the cash to pay a bill rather than forcing a sale.
Charitable giving
Leaving 10% or more of your net estate to charity reduces the rate on the rest from 40% to 36%.
Asset protection
Structuring what passes so that it survives what happens next — a beneficiary's divorce, their creditors, or their own care costs later. The difference between leaving money and protecting it.
What doesn't work
Simply giving your house to the children and staying in it
The gift-with-reservation-of-benefit rules mean the property stays in your estate for tax purposes. You will have lost control of your own home and gained nothing. It also exposes the house to their divorce, their creditors and their own inheritance tax.
Transferring assets to avoid care fees
Local authorities can look back and treat this as deliberate deprivation, assess you as though you still owned the asset, and pursue it. Timing and intention matter enormously here.
Writing a will and considering it done
A will decides who receives what. On its own it reduces no tax, shelters no property and protects no inheritance from anything.
Waiting
Almost every effective step has a clock on it. The seven-year rule needs seven years. Lasting Powers of Attorney cannot be created once capacity is lost. The planning available at 65 is not the planning available at 85.
How we'd approach it
A solicitor drafts. An accountant calculates. An adviser invests. Here, they're all in the same practice, working to one standard set by our TEP-led technical team. Most situations don't need all three — and when yours does, nobody has to be found, briefed or waited for.
That starts with knowing where you stand. Answer eleven questions and we'll send you a report written for your situation, checked by a person before it reaches you. If it shows you're comfortably inside the allowances, we'll say so plainly and you can get on with your day. If it doesn't, it will set out which of the levers above actually apply to you.
The Three Disciplines
One practice, one strategy, one adviser accountable for all three.
Questions we get asked
Does the £325,000 apply to each of my children?
No. It's per estate, not per beneficiary.
We're not married but we've been together thirty years. Does that matter?
Yes, significantly. Allowances don't transfer between unmarried partners, and there is no spouse exemption on the first death. This is one of the most expensive gaps we see.
When is the tax actually due?
Six months after the end of the month of death, before the estate is distributed. Tax attributable to property can usually be paid in instalments over ten years, with interest. The timing is why families sometimes have to sell a house quickly.
Is the report advice?
No. It sets out your position and the planning considerations that apply to it, based on what you tell us. It's checked by your adviser before it's sent, and built on a framework our TEP-led technical team sets and audits — but it isn't a personal recommendation and it isn't a substitute for a conversation about your circumstances.
What if I've already made a will?
Bring it. A large part of what we do is reviewing existing wills against the current rules and the family's current circumstances. Both change.
Find out where you stand
It costs nothing, there's no obligation, and you'll get a report written for your situation — your figure, what it means, and the two or three things that would change it.
Start your Clarity ReportNo obligation. We'll never share your details.