How a Will helps you reduce Inheritance Tax

Maximising your tax-free allowance

A Will allows you to structure your estate efficiently to make the most of available allowances, such as

The Nil-Rate Band (£325,000) – The standard tax-free threshold for everyone

The Residence Nil-Rate Band (£175,000) – If you pass your home to direct descendants (children, stepchildren, grandchildren), your tax-free threshold could increase to £500,000 per person or £1 million for couples (source: Gov.uk).

Without a Will, your estate may not be structured to benefit from these allowances, meaning your family could miss out on potential tax savings.

Passing your wealth to your spouse or civil partner

If you’re married or in a civil partnership, leaving everything to your spouse or partner in your Will avoids Inheritance Tax completely. Anything left to them is exempt from IHT, no matter the value (source: Gov.uk).

Even better, any unused tax-free allowance can be transferred to your spouse—doubling the tax-free threshold for your family.

Example If your estate is worth £800,000 and your spouse inherits everything, there’s no Inheritance Tax to pay. When they pass away, their estate can claim up to £1 million tax-free (£500,000 each).

Making gifts to reduce taxable assets

A Will allows you to plan gifting strategies to reduce the value of your estate before you pass away. Some tax-free gifting options include

Annual gift exemption You can give away up to £3,000 per year tax-free, plus additional small gifts

Wedding Gifts Parents can give their children £5,000 tax-free for a wedding gift

Gifts to charity Anything left to charity is 100% tax-free – and if you donate at least 10% of your estate to charity, the IHT rate on the rest drops from 40% to 36% (source: Gov.uk)

Example Leaving £50,000 to charity could reduce the tax on your remaining estate and make a lasting impact on a cause you care about.

Setting up trusts to protect your assets

A Will allows you to set up trusts, which can legally reduce the amount of Inheritance Tax your estate owes. Trusts can

✔ Protect assets for future generations
✔ Ensure money is used for specific purposes (e.g., education, care costs)
✔ Avoid immediate taxation on large sums

Some trusts remove assets from your estate, reducing your IHT liability—but they must be structured correctly. Learn more about trusts and tax implications from Gov.uk.

Protecting your business from tax

If you own a business, failing to plan ahead could mean your family has to sell it to cover Inheritance Tax. However, Business Relief allows some business assets to be passed on tax-free or at a reduced rate (source: Gov.uk).

Having a Will ensures

• Your business interests are transferred smoothly
• You maximise Business Relief on qualifying assets
• Your business legacy is protected for future generations

Example If your business qualifies for 100% Business Relief, it could be passed on without paying any Inheritance Tax – but without a Will, this might not happen.

How to write a Will (For free!)

One of the biggest mistakes people make is assuming they don’t need a Will – or that it’s something to sort out later. The truth is, the earlier you plan, the more options you have to protect your estate.

The good news? Writing a Will doesn’t have to be expensive or complicated.

At MS-UK, we’ve partnered with the National Free Wills Network, giving you access to 900 trusted solicitors who can help you write or update a simple Will at no cost.

Email Jill at jill@ms-uk.org, or call 01206 226500 or click here to request your free Will writing pack today.