Inheritance tax is one of those topics people tend to approach only when they feel they “ought to”, rather than when it might actually help. Some start too early, some far too late, and many only begin when circumstances force the issue. The truth sits somewhere in the middle. It is possible to start planning prematurely, but it is far more common to leave it until options have narrowed and time has become the limiting factor.
🧭 Is It Ever Too Soon?
For most people, inheritance tax planning becomes relevant only once their likely estate value begins to approach the thresholds at which tax may be payable. According to the Office for National Statistics, median household wealth in Great Britain is £293,700 and the wealthiest 10 per cent hold £1.2 million or more.
If your total assets are comfortably below the inheritance tax thresholds, detailed planning may not be necessary in your thirties or forties. Your financial priorities at that stage are more likely to involve building wealth rather than passing it on.
However, awareness is still useful. Understanding how inheritance tax works can help you avoid decisions that unintentionally create future problems.
🕰️ When It Becomes More Relevant
For many people, the most natural time to begin meaningful inheritance tax planning is in their fifties or early sixties. By this point:
- Property wealth may have grown significantly
- Pension values may be clearer
- Children may be financially independent
- Long term financial goals are easier to define
ONS data shows that households headed by someone aged 65 to 74 have some of the highest levels of median wealth, particularly in property and pensions. This is often the stage at which estates begin to approach or exceed inheritance tax thresholds, making planning more relevant.
🧓 Why Leaving It Too Late Causes Problems
Inheritance tax planning often relies on time. Gifts may take seven years to fall outside your estate. Trusts, life assurance and pension planning all work best when implemented early enough to be effective.
Starting too late can mean:
- Fewer available strategies
- Reduced tax efficiency
- Higher likelihood of assets being assessed for inheritance tax
- Increased pressure on family members to make decisions quickly
In other words, while it is possible to start too early, it is far easier to start too late.
📊 Wealth Levels Matter
The ideal time to plan depends heavily on your likely estate value. For example:
- Households in the top wealth decile, with wealth above £1.2 million, are far more likely to face inheritance tax without planning.
- Those aged 55 to 64 are the group most likely to receive inheritances themselves, often increasing their own estate value.
If your wealth is growing, or you expect to inherit assets, planning earlier can help you avoid crossing thresholds unexpectedly.
🧠 My Final Thoughts
Inheritance tax planning does not need to begin the moment you start building wealth, but it should begin well before you expect your estate to exceed the relevant thresholds. For many people, the most effective window is from their fifties onwards, when their financial position is clearer and there is still time for planning to take effect.
The value of investments can fall as well as rise and you may not get back the full amount you invested. Past performance is not a guide to future returns. Decisions should be made with care and professional financial advice can help you understand what is most appropriate for your situation.
Published on: 01.05.2026
Contact: Daniel Sperber at Coleshill Wealth Management
T: 01675 622 445
E: daniel@coleshillwealthmanagement.co.uk
The information contained in this blog is for information purposes only and does not constitute advice. Please seek financial advice before making any decisions. The value of investments can go down as well as up and you may not get back the full amount you invested. Past performance is not a guide to future returns.
References
- Office for National Statistics. Household total wealth in Great Britain: April 2020 to March 2022. Released 24 January 2025.
- Office for National Statistics. Intergenerational transfers: the distribution of inheritances, gifts and loans, Great Britain: 2014 to 2016. Released 30 October 2018.