How to reduce inheritance tax
Last reviewed 18 August 2026
There is nothing improper in arranging one’s affairs to pay no more tax than the law demands; the difficulty is doing it in good time, and within the rules.
The main levers
Give in good time — gifts fall out of the estate after seven years, and the £3,000 annual exemption and regular gifts from income are exempt at once. Use the spouse exemption — transfers between spouses are tax-free and pass unused allowances on. Leave to charity — charitable gifts are exempt, and leaving 10% or more of the net estate cuts the rate on the rest from 40% to 36%. Claim the reliefs — business and agricultural property may qualify, within new limits from April 2026.
A word of caution
The rules bristle with traps — gifts with reservation of benefit, the seven-year clock, the residence band taper on estates over £2 million. For anything beyond the simple, the reliefs and their conditions are a matter for a solicitor or chartered tax adviser, not a web page.
Questions
What is the simplest way to reduce inheritance tax?+
Does leaving money to charity reduce the tax?+
Sources. GOV.UK, Inheritance Tax reliefs and exemptions; Finance Act 2026 (APR/BPR reform).