BBC Radio 4 – Money Box (UK)
Money Box Live: Inheritance Tax
BBC Radio 4 – Money Box (UK)
•February 11, 2026•28 min
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BBC Radio 4 – Money Box (UK)•Feb 11, 2026
Why It Matters
Inheritance tax reforms could affect a larger share of families, making it crucial for anyone with assets to understand the rules and plan ahead. By clarifying complex tax and legal options, the episode helps listeners protect their inheritances and avoid unexpected costs, a timely concern as the government prepares to tighten the thresholds.
Key Takeaways
- •IHT triggers above £325k nil‑rate band, plus £175k residence allowance
- •Married couples can transfer up to £1 million tax‑free between deaths
- •5% of estates paid IHT in 2022; values raise risk
- •Gifting assets reduces IHT, but seven‑year rule and documentation matter
- •Single, child‑free estates face higher effective IHT than married couples
Pulse Analysis
The Moneybox Live episode demystifies inheritance tax (IHT) by laying out the core thresholds that determine when the levy applies. In England and Wales the nil‑rate band sits at £325,000, with an additional £175,000 residence nil‑rate band for assets passed to direct descendants, effectively allowing a married couple to shield up to £1 million across two deaths. Hosts Clare Moffitt and Nina Sparing stress that despite widespread anxiety, only about five percent of estates actually paid IHT in the 2022‑23 tax year. This low incidence reflects the historic stability of the thresholds, not a lack of liability.
The conversation turns to why that figure is expected to climb. House price inflation has pushed many family homes above the £325,000 limit, and the nil‑rate band has not been adjusted since 2009, creating a fiscal drag that disproportionately affects single or child‑free individuals. The panel also notes recent policy shifts, such as the reduction of 100 percent relief on agricultural assets and the upcoming inclusion of pensions in the IHT net. These changes raise concerns about fairness, especially since single estates contributed roughly a quarter of total IHT liabilities in 2021‑22.
Practical advice dominates the final segment, with experts urging proactive estate planning. Gifting remains a powerful tool: annual exemptions of £3,000 can be supplemented by unlimited regular payments from surplus income, while larger lump‑sum gifts avoid IHT if the donor survives seven years. However, the seven‑year taper and the risk of ‘gift with reservation’ mean careful documentation is essential. For homeowners, preserving the residence nil‑rate band may require timing the sale of a property or seeking professional guidance before liquidating assets for care costs. Overall, the episode underscores that informed decisions and timely advice can significantly mitigate future IHT exposure.
Episode Description
There's a topic that often appears in the Money Box inbox, inheritance tax.
It's money paid by the estate of someone once they die, as long as the total value of all their property, possessions, cash and soon pensions are worth more than a fixed threshold set by the government.
At the moment Government figures say just 5% of estates actually pay the tax, so relatively low, but there are changes coming in this year and next which could increase that number.
Questions around who pays it and how much it is as well as the rules around passing on wealth to loved ones are never far away from the top of our in tray. So, today we'll answer as many as we can.
Joining presenter Felicity Hannah this week is Clare Moffat, pension and tax specialist at the mutual life, pensions and investment company Royal London and Nina Sperring, wealth protection solicitor and partner at the law firm Price, Slater, Gawne.
Presenter: Felicity Hannah
Producer: Sarah Rogers
Editor: Jess Quayle
Senior News Editor: Sara Wadeson
(This episode was first broadcast at 3pm on Wednesday the 14th of January 2026)
Show Notes
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