High Net Worth families are increasingly turning to ‘gifting with control’ strategies as inheritance tax (IHT) reforms prompt a reassessment of how wealth is passed between generations, according to Utmost, a leading global provider of insurance-based wealth solutions.
HMRC figures show that the frozen IHT thresholds are already set to drive tax receipts to a fifth consecutive annual record haul in 2025/26. The further tightening of the regime will accelerate this trend and the OBR once more uprated its projections for IHT at the Spring Statement, now estimating that the Treasury will collect an extra £0.7 billion, taking total receipts to £70.6 billion, between 2025/26 and 2030/31.
Forthcoming reforms bringing unused pension funds within the scope of inheritance tax from 2027 are also reshaping wealth planning strategies, with pensions historically used as an efficient vehicle for passing on wealth outside the estate.
As a result, Utmost says clients are increasingly exploring lifetime gifting to reduce the taxable value of their estate, with these gifts falling outside the taxable estate if the donor survives for seven years, under the Potentially Exempt Transfer rules. However, advisers warn that outright gifts can leave donors exposed if circumstances change, through life events like divorce, or if beneficiaries receive substantial wealth before they are financially prepared.
As such, rather than making outright transfers, many families are seeking structures that allow them to retain oversight of how wealth is distributed to future generations.
This approach, often described as ‘gifting with control,’ can involve placing assets into trusts or other planning structures allowing funds to be released gradually, for example when beneficiaries reach certain ages or life milestones.
Discretionary trusts are often used in these strategies as they allow trustees to retain flexibility over how and when funds are distributed. Utmost analysis of Trust Registration Service (TRS) data earlier this year showed that 121,000 new trusts were registered in 2024/25, taking the total number to 835,000 with the majority of trusts paying.
Mark Jephcott, Senior Relationship Manager at Utmost’s wealth advisory business, said: “With inheritance tax receipts continuing to increase and further tightening of the regime being implemented over the rest of the decade, many families are reassessing how and when they pass on wealth.
“Historically many clients expected to use pension assets as part of their legacy planning, but with those funds falling within the inheritance tax net from 6 April 2027, lifetime gifting is becoming a more common part of that conversation.
“Rather than making outright gifts, families are increasingly looking at structures, like trusts or insurance-based solutions, that allow wealth to be transferred while retaining a degree of control over how it is used. These controls can be relaxed at specific milestones and help to ensure assets are protected and passed on efficiently while supporting long-term family objectives.”
For advisers, the shift reflects a broader change in how clients approach succession planning. Instead of treating inheritance as a single event, families are increasingly planning how wealth will move between generations over time, balancing tax efficiency with responsible stewardship.
The trend highlights the importance of early planning, particularly as frozen thresholds and evolving tax rules continue to increase the number of estates potentially exposed to inheritance tax.
As a result, discussions around structured gifting, governance and intergenerational wealth planning are becoming an increasingly central part of financial advice for wealthy families.
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