Passing wealth on to children and grandchildren is one of the most important financial decisions many families will ever make. With unprecedented levels of wealth expected to move between generations over the coming decades, it is natural to have questions about how best to approach this – and where to start.
For most families, good wealth planning is not just about tax. It is about ensuring long term financial security, supporting family members at the right time, and creating clarity and confidence for the future. Taking a proactive approach can help families avoid surprises, reduce unnecessary tax, and ensure wealth is passed on in line with their wishes.
Understanding Inheritance Tax in everyday terms
Inheritance Tax (IHT) is often one of the first issues families consider when thinking about passing on wealth. In broad terms, it is a tax charged on the value of an estate when someone dies, where that value exceeds certain thresholds. While this may sound straightforward, the way IHT applies in practice can be more complex.
Available allowances, the ability to transfer allowances between spouses or civil partners, and reliefs linked to property can all significantly affect the final liability. As a result, two estates of the same value can face very different tax outcomes depending on how assets are owned and structured.
IHT typically arises where families have seen property values rise over time, built up investment assets, or hold business interests. Understanding where IHT is most likely to apply – and where it may not – is an important first step in identifying whether planning is needed, and what form that planning might take.
Considering family assets as a whole
Every family’s circumstances are different, and the types of assets owned often shape the planning options available. The family home, for example, is frequently both the most valuable asset and the most emotive. Decisions about whether to keep, downsize, gift or pass on the home need to balance practical, financial and emotional considerations.
Pensions play an important role in wealth planning and can form a valuable part of a wider intergenerational plan: how pension benefits are nominated and how they fit alongside other assets can make a meaningful difference over the long term. Robust pension planning has now become more important as a result of the changes implemented following the 2024 Autumn Budget whereby pension assets will be included in estates (and therefore liable to Inheritance Tax) from 6th April 2027.
Alongside property and pensions, families may hold ISAs, investment portfolios or trusts. Looking at these assets together, rather than in isolation, helps ensure decisions are aligned with overall family objectives.
Gifting: when, how much and why timing is important
Lifetime gifting can support the next generation and reduce the value of an estate for IHT purposes. However, a key consideration is affordability. Any gifting strategy should be grounded in a clear understanding of future income and expenditure, ensuring that day-to-day living costs and potential care needs can still be met. This is where detailed cashflow planning can add real value.
Protecting family wealth for the long term
As wealth moves down the generations, there are potential risks that can arise if circumstances change. Relationship breakdown, for example, can have unintended consequences for family wealth if assets are not
structured appropriately.
Planning in this area is not about removing independence or autonomy, but about ensuring that family intentions are respected and long-term outcomes are protected. Decisions around how assets are gifted, whether control is retained, and how wealth is ultimately accessed can all play a role in managing risk while still supporting loved ones.
How JM Finn supports families
Passing wealth to the next generation successfully requires a coordinated approach. At JM Finn, families benefit from a comprehensive investment management service offered alongside dedicated wealth planning support. This helps to ensure that investment decisions support longer-term estate planning objectives. For some families, specialist longer-term solutions such as our Inheritance Tax Portfolio Service may also form part of this picture.
A practical starting point
The best place to begin is often with a clear overview of assets, family circumstances and objectives. Reviewing existing arrangements – such as wills, nominations and ownership structures – can often highlight quick wins or areas that may benefit from further thought. Regular reviews help to ensure that plans remain appropriate as circumstances change and legislation evolves.
If you would like to explore how these considerations apply to your own situation, a JM Finn Wealth Planner can help you review your current position, discuss your family priorities, and consider practical steps towards passing on wealth with confidence.
The information provided is of a general nature and is not a substitute for specific advice with regard to your own circumstances. You are recommended to obtain specific advice from a qualified professional before you take any action or refrain from action.
The information provided is of a general nature and is not a substitute for specific advice with regard to your own circumstances. You are recommended to obtain specific advice from a qualified professional before you take any action or refrain from action.
