Why so many SW6 households are affected
Inheritance tax used to feel like a concern for the very wealthy. In this part of London it is not. A terraced house in the Peterborough Estate or a mansion flat near Hurlingham, plus savings, investments and a pension, can take an estate well past the tax free amounts.
Each person has a nil rate band of £325,000. On top of that there is a residence nil rate band of up to £175,000 when a home passes to children or grandchildren. Anything above the available allowances is usually taxed at 40%. Married couples and civil partners can pass unused allowances to each other, so together they may be able to leave considerably more free of tax.
The residence nil rate band is gradually withdrawn for estates worth more than £2 million. Families with valuable homes in Chelsea or Parsons Green can lose some or all of it without realising, which is one reason a proper valuation of the estate matters.
Planning during your lifetime
Most inheritance tax planning comes down to timing and record keeping. Gifts you make during your life can fall outside your estate, but the rules are specific and HMRC will ask for evidence.
We help you build a clear picture first. What do you own, what is it worth, who do you want it to go to, and what income do you need to live comfortably? Only then does it make sense to talk about gifts, trusts or changes to how assets are held. We also work with your solicitor if your will needs updating.
- Gifts to a spouse or civil partner who lives in the UK are normally exempt
- Each person can give away £3,000 a year free of inheritance tax, and an unused amount can be carried forward one year
- Regular gifts out of surplus income can be exempt if they do not reduce your standard of living
- Larger gifts usually fall outside the estate if you live for seven years after making them
- Gifts to UK charities are exempt and can reduce the rate on the rest of the estate
What is included
- A review of your estate and its likely inheritance tax position
- Use of the nil rate band and residence nil rate band
- Lifetime gift planning and gift records
- Review of business and agricultural property relief
- Pension and estate planning ahead of the 2027 changes
- Inheritance tax returns for executors
- Estate income tax and capital gains tax returns
- Working alongside your solicitor or financial adviser
Recent changes worth knowing about
The rules have moved a lot in the last couple of years. From 6/4/2026, the full relief that used to apply to qualifying business and agricultural property is limited to a capped amount, with a lower rate of relief above it. Owners of family companies and farmland should review their position.
Pensions are also changing. From 6/4/2027 most unused pension funds and death benefits are due to be counted as part of the estate for inheritance tax. For many people their pension was the one asset they assumed would pass on untouched, so this can change the whole plan. We can model how it affects you.
Helping executors after a death
Being an executor is a difficult job at a difficult time. You need to value the estate, work out whether inheritance tax is due, report to HMRC and often pay some of the tax before probate is granted.
Inheritance tax is normally due by the end of the sixth month after the month of death, and interest is charged after that. Some tax on property can be paid in instalments. We prepare the inheritance tax forms, claim any transferable allowances from a late spouse, and deal with the income tax and capital gains tax for the period the estate is being administered. That last part is often forgotten.
Common mistakes
Some of the most expensive errors come from good intentions.
- Giving away the family home but carrying on living there rent free, which usually means it stays in the estate
- Not keeping a record of gifts, leaving executors to piece them together years later
- Forgetting to claim the unused nil rate band of a spouse who died earlier
- Leaving a home in a way that does not qualify for the residence nil rate band
- Making gifts that create a capital gains tax bill without anyone noticing
What to bring to a first meeting
A rough list of what you own is enough to begin. Bring recent valuations of property if you have them, statements for bank accounts, investments and pensions, details of any life insurance, a copy of your will and a note of any significant gifts made in the last seven years. For executors, the death certificate, the will and any letters from banks or HMRC are the starting point.
We review the position for free, explain what we think needs doing and agree a fixed fee before any work starts. Meetings can take place in Fulham or by video, which suits family members who live away from London.
Who this suits
- Homeowners in Fulham and Chelsea whose property has grown in value
- Parents who want to help children onto the property ladder
- Owners of family businesses thinking about succession
- Executors dealing with the estate of a parent or relative
- Couples who want to make sure both sets of allowances are used
Common questions
How much can I leave before inheritance tax is due?
Each person has a £325,000 nil rate band, plus up to £175,000 residence nil rate band if a home goes to direct descendants. Unused amounts can pass to a surviving spouse or civil partner. The exact figure for your estate depends on its value and who inherits.
What is the seven year rule for gifts?
If you give something away and live for seven more years, it normally falls outside your estate. If you die within seven years, the gift may be counted, although the tax on it can be reduced if you survive more than three years. Small and regular gifts can be exempt straight away.
Can I give my house to my children to avoid inheritance tax?
You can, but if you keep living there without paying a full market rent, HMRC usually treats it as still being part of your estate. There may also be capital gains tax and stamp duty points to think about. Take advice before transferring a home.
When does inheritance tax have to be paid?
Normally by the end of the sixth month after the month in which the person died. Interest is charged after that. Tax on property can often be paid in yearly instalments.
Will my pension be subject to inheritance tax?
From 6/4/2027 most unused pension funds and death benefits are due to be included in the estate. Until then most pensions sit outside it. If your pension is a large part of your wealth, it is worth reviewing your plans now.
Do executors need an accountant?
Not always, but many find it helpful, especially where the estate includes property, shares or a business, or where inheritance tax is due. An accountant can also handle the tax on income and gains during the administration period.
Do I need a trust?
Trusts can be useful in some situations, but they have their own tax rules and running costs. Many families do not need one. We look at your goals first and only suggest a trust where it clearly helps.