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How to write a will and manage inheritance tax

Protect your loved ones and simplify estate planning with this step-by-step guide.

Here, we cover:

Why write a will?

Ways you can write your will

Steps to writing a will

Understanding inheritance tax

Tips to manage and reduce inheritance tax

Help and support

Why write a will?

Writing a will makes sure your loved ones are cared for and your wishes are respected. Here are the top 5 reasons why it’s so important: 

  1. Control over your estate
    You decide exactly how and when your property, money and possessions will be shared out.
  2. Inheritance tax planning
    A will can help you manage and potentially reduce the amount of inheritance tax (IHT) payable.
  3. Reduce family stress
    Having a clear will in place can make it easier for loved ones during a difficult time.
  4. Guardianship for children
    If you have young children, you can choose a legal guardian to care for them until they turn 18.
  5. Funeral wishes
    You have a say on what you’d like to happen, such as burial, cremation, or other arrangements.

Ways you can write your will

Choose the option that best suits your needs:

  1. Use a solicitor
    Look for a solicitor or regulated professional with an in-depth knowledge of wills, probate, and inheritance laws. This is the most expensive option but is better suited for complex situations. For example, if you have children under 18, are previously bereaved, or own a business.
  2. Use a will-writing service
    A will-writing service is a more affordable option, ideal for straightforward needs. However, look for professionals who are members of recognised organisations for added protection as not all are regulated.
  3. Write a will yourself
    DIY will-writing services or templates are the cheapest option. However, this can be risky for complex situations, as errors could invalidate your will. A DIY approach works well for simple wishes, like leaving everything to your spouse or civil partner.

Steps to writing a will

1. Understand the legal requirements

There are certain rules to follow for a will to be valid:

  • You must be 18 years or older
  • Be of sound mind
  • The will must be written voluntarily, without pressure from others
  • You need to sign your will in front of 2 witnesses
  • Your 2 witnesses also need to sign your will in front of you
  • Witnesses need to be over 18 and of sound mind

You can’t leave your witnesses (or their married partners) anything in your will. 

If you make any changes to your will, you must follow the same process again. 

For more information visit GOV.UK: Making a will

2. List your assets and possessions

Create a thorough list of everything you own, including:

  • Your home
  • Bank accounts, savings, and investments
  • Life insurance policies and pensions
  • Cars, furniture, jewellery, and antiques

3. Decide who gets what

  • Identify your beneficiaries (the people or organisations you want to leave your assets to)
  • Consider what happens if a beneficiary passes away before you
  • Decide if you’d like to leave money to charity

4. Appoint an executor

The executor of a will is responsible for handling someone’s money and possessions after they die. You can name a solicitor (they may charge for this) or choose a trusted friend or family member, as long as they are over 18 and of sound mind. You can have up to 4 executors.

5. Include guardianship for young children

If you have children under 18, name a guardian to care for them. You can also include who should look after your pets if you have them.

6. Review and update your will regularly

Review your will often, and update after big life events like marriage, having children, or buying property. 

Understanding inheritance tax

What is inheritance tax?

Inheritance tax is a tax on someone’s estate (money, property, investments, and belongings) after they die. However, with careful planning, it’s possible to reduce or eliminate this tax – leaving more to your loved ones.

What is the inheritance tax-free threshold?

In the UK, the inheritance tax-free threshold, known as the Nil Rate Band (NRB), allows you to pass on up to £325,000 of your estate without incurring inheritance tax.

If you leave your home to your children (including adopted, foster or stepchildren) or grandchildren, your tax-free threshold can increase to £500,000.

There’s normally no inheritance tax to pay in the following scenarios:

  • The value of your estate is below the inheritance tax-free threshold
  • You leave everything above the tax-free threshold to your spouse, civil partner, a charity, or a community amateur sports club

Keep in mind: if you’re married or in a civil partnership and your estate is worth less than your threshold, any unused threshold can be added to your partner’s threshold when you die.

The value of any tax benefits described also depend on your individual circumstances and tax rules could change in the future. Tax-free means free of IHT.

How much is inheritance tax?

If the total value of your estate is more than your tax-free threshold, then the amount that sits above the threshold will usually be liable for tax at a rate of 40%.

For example, let’s say your estate is worth £800,000 (which includes your residential property worth £200,000) and you want to leave it all to your children. If your tax-free threshold is £500,000 (£325,000 of your NRB plus £175,000 of your RNRB), there will be an IHT bill of £120,000  – that’s 40% of £300,000.

How much is your estate worth?

To work out the value of your estate:

  1. List all your assets including money in the bank, property, possessions, investments, savings and life insurance.
  2. Deduct any debts and liabilities, such as your mortgage.
  3. Calculate, and keep a record of, the current value of your estate, including any property valuations.

Who pays inheritance tax?

UK inheritance tax applies to all assets located within the UK, regardless of the individual's residency. Additionally, it applies to worldwide assets if the individual is considered a long-term UK resident.

For more information, please visit: GOV.UK: Inheritance tax if you’re a long-term UK resident

When is inheritance tax due?

Your loved ones will have 6 months after your death to pay inheritance tax. For example, if you pass away in January, the IHT must be paid by 31 July to avoid interest charged by HMRC. 

The executor or administrator can share out the remaining estate once:

  • Inheritance tax is paid
  • Any debts are settled
  • The grant of probate (a legal document) is issued

To sell or transfer ownership of assets, the executor will need to present the grant of probate. 

Tips to manage and reduce inheritance tax

Reducing inheritance tax isn’t as simple as giving away your estate before you pass. Gifts are often counted as part of your estate and may be taxed if you die within 7 years of making them. That’s why early planning is key to passing on your wealth effectively.

If you think you might be liable for inheritance tax, here are some ways to reduce it:

  1. Leave money to charity
    Donations to charity are usually tax-free. If you leave 10% or more of your net estate to charity, the inheritance tax rate on the rest of your estate could drop from 40% to 36%.
  2. Give away up to £3,000 a year in gifts
    You can gift up to £3,000 each tax year without it being subject to inheritance tax. If you don’t use this allowance in one year, you can carry it forward to the next, allowing you to gift up to £6,000.
  3. Make regular gifts from excess income
    Inheritance tax applies to your assets, but not to regular gifts made from your income (like pensions or earnings). These gifts must be consistent and leave you with enough income to maintain your lifestyle.
  4. Keep money in your pension
    Pensions are usually excluded from inheritance tax. However, starting 6 April 2027, unused pension funds and death benefits will count as part of your estate for inheritance tax.
  5. Put life insurance policies in trust
    Writing your life insurance policy into a trust makes sure it goes directly to your beneficiaries and is excluded from your estate for inheritance tax purposes. Many life insurance providers can help you set up a trust document – just contact them to get started.

Help and support

Estate and tax planning is complicated, and much will depend on your individual circumstances. Sometimes, it’s worth getting advice to help you make the right decisions.

If you have over £100,000 in savings and investments, and hold an HSBC current or savings account, we can offer you a wide range of financial advice – from protecting your family to passing on your wealth. Please note, fees apply.

If you prefer, you can find a specialist adviser in your area. Just check the Financial Services Register to make sure they’re regulated by the Financial Conduct Authority (FCA). 

Planning for what you want to happen after you die can feel scary, but you should feel proud of yourself for taking this first step. It can make the world of difference to your family’s future. 

This article as last updated: 25/03/2026, 08:04

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