Inheritance Tax planning for new fathers in their 60s and beyond

It is becoming increasingly common for men to start or grow their families later in life.

In 2024 alone, over 1,000 babies in England and Wales were born to fathers aged 60 or older, a 14.2 per cent rise on the previous year, according to the latest Office for National Statistics (ONS) data.

While celebrity examples like Robert De Niro, Rod Stewart and Al Pacino make the headlines, this is a growing reality for families across the UK.

Starting a family later comes with a financial challenge few people consider early enough: Inheritance Tax IHT).

What happens to your estate and your young children if you are no longer around?

Your children are young, your estate is large, and IHT does not wait

Older parents often have significant wealth when they start or expand their families. But without planning, up to forty per cent of your estate above £325,000 could be lost to IHT.

If your children are still in school or university when you die, the last thing they need is a long wait for probate or a surprise tax bill that reduces their inheritance.

Life insurance can cover the gap, but only if you set it up right

A simple life insurance policy could help your family cover the IHT bill or replace your income.

However, many parents forget to write the policy into trust, meaning it could accidentally increase the size of your taxable estate and worsen the problem you were trying to solve.

Gifts during your lifetime – use them or lose them

The longer you leave your estate untouched, the bigger the potential IHT bill.

Regular, structured gifts to your family, or using your annual allowances, could remove large sums from your estate completely, if you survive seven years.

Even better, gifts from surplus income can fall outside your estate straight away if done correctly.

Trusts protect wealth and give your children access at the right time

Do you want your children to inherit everything at eighteen?

Probably not. Trusts let you control when and how your children access their inheritance, whether that is for education, their first home, or starting a business.

Trusts also keep the assets outside your estate (depending on the type of trust and how long they have been set up), reducing your eventual IHT bill.

Your pension could be your most tax-efficient legacy

Many older parents focus on their home and savings, but pensions are often the most tax-efficient way to pass wealth down a generation.

In many cases, your pension pot falls outside your estate for IHT purposes, meaning your children could inherit it tax-free.

Own a business? Your plans matter more than ever

If you are running a business, you may qualify for Business Relief, but your children will be too young to step in. Who will take over? Will the business be sold, and how will the proceeds be protected for your family?

Business owners need watertight succession plans, cross-option agreements and shareholder arrangements, especially when younger children are involved.

Planning for a future you may not see

Starting or growing a family in later life can be a wonderful new chapter. But it brings responsibilities that your financial plans need to reflect.

IHT, guardianship, trusts and protection policies are tools that make sure your family is secure, whether you are there to see it or not.

If your family circumstances have changed, or if you are thinking about your legacy for the first time in a while, we can help you review your plans. Contact us today.