Whether you own rental properties in Belfast or commercial units in Derry, your estate could face higher tax exposure unless you adapt now.

📌 2025 Inheritance Tax Updates – What’s Changing?

While the IHT threshold itself hasn’t changed (yet), the UK government has made moves that impact property investors and business owners in subtle but critical ways. Key developments include:

• A formal review of Business Relief and Agricultural Relief, with caps being considered for property-rich businesses.
• Increased focus on property passed through companies, especially where family members are shareholders.
• New guidance on gifting property portfolios, with more aggressive scrutiny of "gifts with reservation" and undeclared lifetime transfers.
• Political pressure to phase out or restrict IHT loopholes in advance of the next General Election.

Though not headline-grabbing, these moves represent a shift in tone: HMRC is tightening up on inheritance planning via property ownership — especially for landlords and developers.

🏘️ How This Affects Northern Ireland Landlords and Developers

If you own multiple properties — even just a few buy-to-lets in Newtownards or Coleraine — your estate may already exceed the standard £325,000 nil-rate band (or £500,000 with the Residence Nil-Rate Band).

Here’s what this means:

• Any value above the threshold is taxed at 40% on death.
• Property values in NI have increased steadily, meaning more estates are now caught in the IHT net.
• Company-owned property portfolios are under closer scrutiny to prevent avoidance.

🧮 Example: Simple Portfolio Scenario

Let’s say you own:

• 3 rental houses in Lisburn worth £200,000 each
• A home worth £300,000
• Cash & shares worth £100,000

Total estate: £900,000 Minus Residence NRB + NRB = £500,000 Taxable estate: £400,000 IHT: £160,000 payable on deathThis liability can create major issues for beneficiaries — often forcing the sale of properties to meet tax obligations.

🧠 Planning Strategies for Northern Ireland Investors

✅ Use a Limited Company (with care)

Properties held inside a limited company are not part of your personal estate — but shares in the company are. Depending on how the company is structured, these shares may or may not qualify for Business Relief.

• Actively trading property development companies might qualify
• Passive holding companies (typical buy-to-let models) generally do not

Tax tip: Structure your business to demonstrate "trading" activity to preserve reliefs.

✅ Gift Properties Early – But Beware the 7-Year Rule

Gifting a property to your children or placing it in trust before your death can reduce your IHT exposure, but:

• Gifts must be made at least 7 years before death to escape IHT completely.
• If you still benefit from the property (e.g., rent, occupancy), it becomes a gift with reservation and may still be taxable.
• Transferring property triggers Capital Gains Tax (CGT) at the point of transfer unless exempt.

✅ Leverage the Residence Nil-Rate Band (RNRB)

If your main home is left to direct descendants (children or grandchildren), you can claim an additional £175,000 allowance, on top of the standard £325,000. But there are conditions:

• The estate must be below £2 million to use the full RNRB.
• It only applies to your primary residence, not buy-to-lets.

✅ Consider Life Insurance in Trust

For those who expect to exceed the IHT threshold, a simple but effective solution is to take out a life insurance policy equal to the expected IHT liability — and place it in trust. This ensures your heirs receive the proceeds outside your estate to cover the tax bill.

📋 Steps You Should Take in 2025

1. Get a full estate valuation — including current property values, cash, shares, pensions, and business assets.
2. Review your company structures — and assess whether your property activity qualifies as trading or investment.
3. Create a succession plan — especially if your children or spouse are already involved in your property business.
4. Review your wills and trusts — to ensure they reflect your current portfolio and intentions.
5. Consult a tax advisor — especially before making large gifts, selling shares, or transferring properties.

🤝 How Taxpertise Can Help

At Taxpertise, we understand the intersection of property investing and inheritance planning. Whether you hold properties personally or through a company, we’ll help you build a tax-efficient legacy.✔ IHT forecasting ✔ Gifting and trust advice ✔ Company restructuring for Business Relief ✔ Will and estate reviews📞 Book a free IHT strategy session today — and make sure your property legacy goes to your family, not the taxman.