Case Study: Protecting Family Wealth Through Inheritance Tax Planning

Client Profile

David (68) and Linda (66), a retired couple, came to DG Financial after becoming increasingly concerned about the impact inheritance tax could have on their estate.

They had built up significant wealth over their lifetime — including their family home, investment portfolios and savings — and wanted to ensure that as much as possible would pass to their children and grandchildren.

The Challenge

David and Linda’s estate had grown to a level where inheritance tax was becoming a real issue.

Like many families, they had not previously undertaken structured estate planning and were surprised to learn that:

• inheritance tax can be charged at 40% on the value of an estate above available allowances

• a large portion of their wealth could be lost to tax without careful planning

• their existing wills did not fully reflect their current financial position

  
  

They also faced a common dilemma — how to reduce their potential tax liability without compromising their own financial security during retirement.

Our Approach

We worked closely with David and Linda to create a tailored inheritance tax strategy that balanced control, flexibility and long-term tax efficiency.

1. Establishing a clear estate position

We calculated the full value of their estate and estimated their potential inheritance tax liability. This gave them a clear understanding of the scale of the issue and allowed us to prioritise the most effective planning opportunities.

2. Making use of gifting allowances

We introduced a structured gifting strategy, helping them:

• utilise their annual gifting allowances

• begin passing wealth to their children during their lifetime

• understand the importance of the “seven-year rule” for larger gifts
  

Gifting can be a highly effective way to reduce an estate over time while allowing clients to see their family benefit sooner.

3. Trust and investment planning

We recommended solutions that allowed assets to be placed outside of their estate while still maintaining an appropriate level of control.

This included considering investment structures that could qualify for inheritance tax relief after a qualifying period, helping to move capital out of the estate more efficiently — a strategy commonly used in estate planning. 

4. Reviewing wills and estate structure

We worked alongside their solicitor to ensure their wills were aligned with their objectives, making full use of available allowances and ensuring assets would pass in the most tax-efficient way.

5. Maintaining financial independence

A key priority throughout was ensuring David and Linda retained sufficient income and capital to support their lifestyle, so any planning did not leave them financially exposed.

The Outcome

Following implementation of their plan, David and Linda were able to:

• significantly reduce their projected inheritance tax liability

• begin passing wealth to their family in a controlled and tax-efficient way

• retain confidence in their own long-term financial security

• ensure their estate was structured in line with their wishes

Most importantly, they moved from uncertainty and concern to having a clear, proactive plan in place.

How DG Financial Helped

Inheritance tax planning is not just about reducing tax — it is about ensuring your wealth is passed on in the way you intend.

At DG Financial, we help clients:

• understand their potential inheritance tax exposure

• structure their estate efficiently

• balance gifting with personal financial security

• create long-term strategies that adapt as legislation changes