Spend, gift or donate?

The most efficient way to reduce an inheritance tax bill is also the most straightforward.

Reduce the value of the estate.

There are a few ways to do that.

You could spend it, enjoying the best retirement you possibly can.

You could give it away, to children or into trust structures, where the seven year rule may apply.

Or you could give to charity, which could be immediately effective from a tax perspective.

Each approach works differently and could suit different families for different reasons.

But the honest truth is this.

Most things that reduce your inheritance tax bill require you to make yourself less wealthy during your lifetime.

That is not a reason not to plan.

It is a reason to plan carefully, with a clear understanding of what you are prepared to do and what you are not.

Getting that clarity is usually where the most useful conversations begin.