In this episode of The UltimateFD Podcast, I sit down with Tej, a specialist tax adviser, to examine how business owners can use trusts to protect family wealth from inheritance tax across generations.

Recent Labour government changes have brought pensions into the inheritance tax charge and pushed capital gains tax rates higher. Tej notes that over half the UK population now faces some level of IHT liability from rising property values alone, which makes early planning especially relevant for business owners who have built up substantial assets.

We go through what a trust actually is: a separate legal entity with no owner, meaning assets held inside it never sit in anyone's personal estate and never attract inheritance tax on death. Tej explains the three parties involved: the settler who creates and funds it, the trustee who manages it (and can be the same person as the settler), and the beneficiary, who cannot also be the settler.

We also cover the practical mechanics, including how a family investment company with different share classes can freeze the current valuation of a property portfolio and direct all future growth into trust-held shares that remain permanently outside any personal estate. Tej walks through the 10-year charge on trust assets above £325,000, the 45% income tax rate on trust income, and why starting this process early (by gifting shares into a trust every seven years) produces far better results than leaving it to a will.

This episode is for any business owner with a property company, a trading business, or meaningful personal assets who has not yet thought seriously about where that wealth lands on death. Tax planning should not drive your decisions, but leaving the structure too late will cost far more than getting it right now.

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