Avoiding Common Mistakes With Inheritance Tax Services in Portsmouth

Inheritance Tax Services in Portsmouth are more in demand than ever in 2025. With local property values continuing to rise, more families are discovering that their estates now fall above the current £325,000 inheritance tax threshold. Many don’t realise this until it’s too late.

Inheritance Tax (IHT) is a government charge on the value of a person’s estate when they pass away. In most cases, anything above the threshold is taxed at 40%. But the good news is that there are ways to reduce or even eliminate this tax with the right planning. That’s where professional inheritance tax services come in.

At its core, proper planning is about protecting your family’s future. It ensures that more of your money goes to your loved ones, rather than being paid to HMRC unnecessarily. A professional adviser will help you make sense of things like gifting rules, the residence nil-rate band, and how to use exemptions effectively.

In Portsmouth, where property values and family arrangements are often complex, tailored advice can make a significant difference. Yet despite how important this topic is, many people either don’t seek help or make common mistakes that end up costing thousands.

In this blog, we’ll look at the most frequent errors people make when dealing with inheritance tax planning and explain how working with experienced professionals can help you avoid them. Planning early, getting advice, and staying informed are the keys to securing what you’ve worked hard for.

Mistake 1: Assuming Your Estate Is Too Small To Be Taxed

One of the most common misconceptions around inheritance tax is the idea that “it won’t apply to me.” In 2025, the inheritance tax threshold remains at £325,000, where it has been frozen for several years. This is known as the nil-rate band. While it may sound like a generous figure, the reality in Portsmouth is quite different.

With average house prices in Portsmouth climbing steadily and many family homes now valued between £350,000 and £500,000, a growing number of residents are finding their estates creeping above the tax threshold – sometimes without even realising it. Add in savings, pensions, and personal possessions, and it becomes clear how easy it is to exceed the limit.

Assuming your estate is too small can lead to costly mistakes. Families may be unprepared for a sudden tax bill, and in some cases, loved ones are forced to sell family homes or use savings just to cover the cost of the tax.

That’s where Inheritance Tax Services in Portsmouth become especially valuable. Local advisers understand the housing market, the types of estates common in the area, and how to make the most of available reliefs. They can help you take simple steps like using gifting allowances or placing assets in trust to reduce the value of your taxable estate.

In short, don’t assume you’re in the clear because you don’t feel wealthy. Property prices and asset values have a habit of creeping up. Getting local, professional advice can stop your family from facing unexpected surprises after you’re gone.

Mistake 2: Not Making Use of Allowances and Reliefs

When it comes to inheritance tax, the rules around allowances and reliefs can feel like a maze. But missing them can cost families tens of thousands of pounds. This is where Inheritance Tax Services in Portsmouth can make a real difference.

In 2025, the nil-rate band is still £325,000. This means the first £325,000 of your estate is tax-free. But there’s also the residence nil-rate band, currently set at £175,000, which can apply if you leave your home to your children or grandchildren. Together, a married couple could potentially pass on £1 million tax-free if planned properly.

Then there are gifting rules. You can give away up to £3,000 each year without it affecting your tax position. There’s also no tax on small gifts under £250 per person, and larger gifts may fall outside your estate if you survive for seven years after making them.

Business owners and farmers in Portsmouth may also be entitled to Business Property Relief (BPR) and Agricultural Relief, which can reduce the taxable value of certain assets by up to 100%. These reliefs can be complicated to claim correctly, but they can save families substantial amounts when used properly.

Sadly, we’ve seen examples where families were unaware of these rules and paid much more than they needed to. In one local case, a family paid over £80,000 unnecessarily simply because a property transfer wasn’t structured to qualify for the residence nil-rate band.

Professional advice ensures that none of these opportunities are missed. The rules are there to be used, and with the help of experienced inheritance tax specialists, you can make sure your family benefits from every allowance available.

Mistake 3: Leaving It Too Late To Plan

One of the most common mistakes people make with inheritance tax is assuming there’s plenty of time to deal with it. But when it comes to Inheritance Tax Services in Portsmouth, timing is everything.

In 2025, the rules around gifting are strict. For example, gifts only fall outside your estate for tax purposes if you live for seven years after making them. This is known as the seven-year rule. If you leave planning too late and something unexpected happens, those gifts may still count towards your estate and push it over the tax-free threshold.

We’ve worked with families in Portsmouth who thought they had “plenty of time”, only for illness or sudden loss to change everything. In those cases, the chance to reduce their liability had already passed.

Another issue with late planning is that it limits your options. Setting up a trust, for example, can be a powerful way to protect assets and reduce inheritance tax, but trusts often need to be in place for several years to be effective. Leaving it to the last minute can mean that these strategies can’t be used, or worse, used incorrectly.

Then there’s the matter of will writing. Without a legally valid will, your estate may not be distributed the way you intended. Worse still, your loved ones could be left with unexpected tax bills or disputes. At HT Advisory, we often help families in Portsmouth draft wills that not only reflect their wishes, but also work in their favour from a tax perspective.

The best time to plan is today. With the right guidance and a clear strategy, you can reduce what your estate owes and pass on more to the people you care about.

How Inheritance Tax Services in Portsmouth Help You Get It Right

When it comes to planning your estate, trying to do it all on your own can lead to missed opportunities and costly mistakes. This is where Inheritance Tax Services truly make a difference.

Working with professionals means you get advice that’s not just accurate, but also tailored to your unique situation. At HT Advisory, we don’t believe in one-size-fits-all plans. Instead, we look at the full picture from your assets and income to your family structure and future goals.

We understand that property values in Portsmouth have risen significantly over the past decade. What once seemed like a modest estate can now easily tip over the inheritance tax threshold. Our team has local knowledge of property trends, which helps us give realistic, practical advice. We’ve supported many families in Portsmouth who were surprised to find they needed to plan – even when they thought they wouldn’t be affected.

We also take time to understand family dynamics. If your estate needs to be divided between children, stepchildren, or dependents with special needs, we’ll help make sure it’s done fairly, tax-efficiently and in line with your wishes.

Our services include help with gifting strategies, setting up trusts, will writing, and making the most of reliefs like the nil-rate band and residence nil-rate band. We’ll also ensure you understand the long-term effects of your decisions – not just for your estate, but for your family too.

Getting professional help means you can plan with confidence, knowing your legacy is protected and your loved ones are looked after. And that’s something worth doing right.

How We Can Support

It is never too early to start thinking about what you leave behind. Whether your estate is large or small, having a proper plan in place means your loved ones are protected, and your wishes are clear. Many people in Portsmouth assume inheritance tax will not affect them, but with house prices continuing to rise and the threshold still set at £325,000 in 2025, more families are being caught out.

At Henry Thomas Advisory, I speak to families every day who are looking for reassurance, guidance, and a simple way to make sure everything is in order. I believe inheritance planning should never feel overwhelming. Our job is to help you feel confident and informed, whether you are thinking about writing a will, setting up a trust, or just trying to understand what applies to your situation.

We take time to understand your personal story, your family, and what you want the future to look like. This is not just paperwork. This is about making sure the people who matter most to you are looked after properly.

If you are not sure where to begin, I can help you take that first step. It all starts with a conversation, and everything we discuss is kept fully confidential.

You can call us today on 02392 988841 or head to www.htadvisory.co.uk to get in touch.

Let’s talk about your legacy. It is one of the most important things you can do for your family’s future.