Read time: 2 mins (approx.)

Families often come to us having worked out roughly what their Inheritance Tax bill would be if they died today.

It is a sensible place to start.

But it is only half the picture.

Because the figure you calculate today is not the figure your family will face.

Two things are happening at once, and they both push in the same direction.

The first is that your wealth is probably growing.

Property values rise over time. Investment portfolios grow. A pension that is not being drawn on continues to accumulate.

None of that growth is a problem in itself. It is what you have worked for.

But every pound of growth above your available allowances could be taxed at 40% when you die.

The second is that the allowances themselves are standing still.

The nil rate band has been £325,000 since 2009, and the thresholds are set to remain frozen for several more years yet.

So the line does not move, but your estate keeps rising above it.

The effect compounds in a way that surprises people.

Take a couple in their late sixties with a portfolio of £2 million that they have no particular plans to spend.

If that portfolio were to grow at a reasonable long term rate, it could be worth considerably more by the time it passes to the next generation.

Investment returns are never guaranteed, and values can fall as well as rise.

But where assets do grow, the Inheritance Tax liability grows alongside them.

Which is why we tend to ask families two separate questions rather than one.

The first is how much tax would be due if the worst happened tomorrow.

The second, and often the more important one, is what that liability could look like in ten or twenty years if nothing changes.

The answer to the second question is usually what prompts people to act.

There are strategies that address this.

Some focus on reducing the value of the estate now, through spending, gifting or charitable giving.

Others are designed to slow the growth rather than reduce the capital, so that future increases in value accumulate outside the estate rather than inside it.

Which approach makes sense depends entirely on the family, their circumstances, and what they are comfortable giving up in order to achieve it.

But the one thing that tends not to help is waiting.

Most of the available options need time to work. Some take two years to become effective. Others take seven.

And in the meantime, the problem you are hoping to solve continues to get larger.