Probate and Will, Trust & Estate Disputes

Publish date

10 November 2022

What is the best way to pass on your wealth?

It is only natural to wish to pass on your wealth to benefit your loved ones or create a lasting legacy by giving to charity. But what is the best, most tax efficient way to do so?

Simon Mitchell, Head of Wills, Estate & Tax Planning gave a brief overview of the options in The Guardian’s ‘Good Life’ supplement.


An outright gift is one of the simplest ways. These may be chargeable to Inheritance Tax (IHT) if you die within seven years of the gift. Each person can give away £3,000 a year, which is immediately exempt from IHT and outside the seven year rule. You can also roll forward one year’s allowance if it was not used to give up to £6,000 away in one tax year with no tax consequences. Finally, you can also give up to £250 to an unlimited number of individuals each year.

If you wish to give money or assets but would like to retain some control, a transfer into a trust may be more appropriate, though there are tax implications to consider. If you have a large amount of available cash, a Family Investment Company may be an appropriate vehicle.

Charitable giving

Any money passing to a registered UK charity, whether through a lifetime gift or as an inheritance, is exempt from IHT. A lower IHT rate of 36% also now applies, provided that 10% of the residuary estate passes to charity (though inevitably the rules are more complex than this).

Charities can also benefit by way of a post death variation. Even if no gift to charity is made under the deceased’s will, the beneficiaries of the estate can posthumously redirect some of their inheritance to charity in this way and have a two year window starting with the date of death in which to carry out a variation.

Charitable trusts

If an individual does not know which charity they would like to benefit, they could consider setting up a charitable trust, which can be established during life or on death. As long as they are properly run and registered with the Charity Commission if necessary, tax reliefs will be available when gifting to a charitable trust founded by the individual making the gift.

We generally advise only establishing a charitable trust if you have the time to run them and are intending to gift at least £500,000 to the trust.

If you would like more information or advice tailored to your unique needs, then please do get in touch

Heathervale House reception

Keep up to date with our newsletters and events