What is The Great Wealth Transfer – and What Could it Mean for You?
Nicholas Clark, 7 July 2025
Nicholas Clark, 7 July 2025
Over the coming decades, we’ll see one of the largest intergenerational wealth shifts in history—often referred to as the Great Wealth Transfer. While the term originated in the US, the same trend is unfolding in the UK. It’s estimated that more than £5 trillion in assets will be passed down the generations by 2050.
Recent announcements in the Autumn 2024 Budget—especially around Inheritance Tax (IHT), pensions, and Business Relief—have brought estate planning into sharper focus. With some of these changes already in motion, many families are considering how best to prepare for this wealth shift sooner than expected.
What’s Changing with Inheritance Tax?
One key Budget announcement was the continued freeze of the Inheritance Tax Nil Rate Band at £325,000 until 2030—a figure that hasn’t changed since 2009. With asset values rising over time, more estates are now falling into taxable territory.
As a result, there’s been a growing demand for advice on how to pass on wealth tax-efficiently—both during one’s lifetime and through estate planning.
Why More Families Are Gifting During Their Lifetime
The UK has an ageing population, and life milestones like having children are happening later. As a result, it’s estimated that people currently aged 20–35 won’t receive their inheritance until they’re around 61.
At the same time, the rising cost of living is creating pressure across generations. Many older individuals are now looking at ways to support loved ones financially earlier—and lifetime gifting is becoming more common.
This can also be a valuable way to reduce potential inheritance tax, but there are important rules to understand.
How Are Gifts Treated for Inheritance Tax?
Gifts can include:
If a person lives for seven years after giving a gift, it is typically exempt from IHT. However, if they die within seven years, tax may be payable depending on:
Key IHT rules to know:
It’s a complex area, which is why professional advice is essential.
Don’t Forget the Basics: A Will is Still Essential
Surprisingly, over half of UK adults don’t have a will. Yet a valid and up-to-date will is one of the most important elements of any estate plan.
Without one, your estate may be distributed according to the rules of intestacy—which might not reflect your wishes. A will ensures your legacy is protected and passed on as intended.
How We Can Help
At LFWM, we work closely with families across generations to help them navigate the complexities of inheritance tax, estate planning, and wealth transfer.
By building long-term relationships with our clients and their families, we ensure each stage of wealth transition is:
Whether you're thinking about passing on your wealth or expecting to inherit, now is the time to start planning.
To speak to a trusted wealth planner about any of the topics in this article, contact Chartered Financial Planner Nicholas Clark at nicholasclark@lfwm.co.uk.
