Directors: reduce your Inheritance Tax

The Inheritance Tax problem for business owners

Without an effective plan, 40% of everything above your available thresholds goes to HMRC when you pass. For many directors, that is a significant proportion of what they have spent a career building. There are legitimate, HMRC-compliant structures that can reduce that exposure considerably, and the earlier they are put in place, the more effective they become.

Inheritance Tax and the Family Investment Company

A Family Investment Company lets you hold and grow family wealth in a company you control. As the founding director, you retain full control while the share structure allows future growth to accrue to the next generation, reducing the value that builds up in your personal taxable estate over time. It is a corporate structure, not a trust, and does not require you to give up control to be effective.

The potential benefits include a significant reduction in Inheritance Tax exposure on accumulated wealth, tax-efficient compounding of investment returns inside the company, and a flexible framework for passing assets to the next generation while keeping control within the family. The right structure depends on your specific situation, which is why the conversation with TLPI is the starting point.

Inheritance Tax and the Small Self-Administered Scheme (SSAS)

A SSAS is a company pension scheme designed specifically for directors. It is one of the most flexible pension structures available in the UK, with the ability to hold commercial property, lend to the sponsoring employer, and accommodate multiple members including family members, making it well suited to succession planning.

From 6 April 2027, unused pension funds will be brought into the estate for Inheritance Tax. Anyone holding or considering a SSAS should plan on the basis of the new rules rather than the outgoing position. A SSAS remains a powerful tool for retirement and business planning. The April 2027 change is one of several reasons to review your overall position now, not later.

Combining the SSAS and the FIC

Many directors use both structures as part of a joined-up plan. A SSAS builds tax-efficient retirement wealth with flexibility over how and when it is drawn. A FIC holds investment wealth and allows future growth to accrue outside the director's personal estate over time. Together they can form a coordinated strategy, exactly the kind of planning TLPI designs for directors who want their business success to benefit future generations.

Every situation is different. A conversation with TLPI is where it starts.