Read time: 2 mins (approx.)

Most people assume that once they have written a will, their Inheritance Tax position is taken care of.

It is an understandable assumption.

A will is the document that says what happens to your money when you die, so surely it is the place where the tax gets sorted out.

The difficulty is one of timing.

A will comes into effect at the point of death.

But almost everything that meaningfully reduces an Inheritance Tax bill needs to happen while you are still alive.

Some actions need to be taken two years before death to be effective.

Others need seven years.

In certain circumstances there is even a fourteen year rule to consider.

A will cannot satisfy any of those because by definition it only does its work at the very end.

So no, a will on its own does not typically do a great deal to reduce what your family will owe.

That does not mean the contents of a will are irrelevant to your tax position.

There are things you can do within a will that have real consequences in both directions.

Take the residence nil rate band, an additional allowance available to those passing a main residence to direct descendants.

Sensible use of that allowance on first death can protect it from being lost on second death, and that comes with a genuine Inheritance Tax saving.

Equally there are ways to make the position worse.

For a married couple, making gifts within a will that fall outside the available allowances can bring an Inheritance Tax charge forward to first death rather than second.

That is not always the wrong thing to do and there can be good reasons for it.

But it should be a deliberate decision rather than an accident.

The point is that a will and an Inheritance Tax plan are two different things that need to be considered together.

Writing a will without understanding how it interacts with your wider tax position leaves value on the table.

And in some cases it creates a liability that did not need to exist.