Inheritance tax planning

No. What it can do is change where future growth builds up. Value leaves your estate only when shares, or cash used to buy them, are given away, and gifts to individuals take seven years to fall out of account. Shares you keep, and any loan you make to the company, stay in your estate. The benefit is mainly in capping the value you hold while growth accrues to others.

Add up everything you own, including your home, investments, business interests and, from April 2027, most unused pension funds. Compare the total with the nil-rate band of £325,000 and the residence nil-rate band of up to £175,000, then allow for what passes to a spouse. Tax is 40% on the excess. A short conversation can tell you quickly whether planning is worth pursuing.

Earlier is better, because most lifetime gifts need seven years to fall fully outside the estate and growth is easier to redirect while values are lower. That said, planning must leave you with enough to live on. Start by understanding the numbers, then decide how much you can comfortably give away, and use the structure that fits your family.