How to Avoid Inheritance Tax When Second Parent Dies

28 May 2026

We understand that the last thing most people want to plan for is their own passing. However, the reality is that family members can be left with hefty inheritance tax bills if the right preparations are not considered.

As inheritance tax specialists, our team can mitigate this problem. In this blog, we’ll outline how to avoid inheritance tax when a second parent dies.

What Rules Are in Place Surrounding Inheritance Tax When Parents Die?

Inheritance tax can become a major issue when a second parent dies. If the couple are married or civil partners, this is not an issue when the first parent dies as assets are passed across to the surviving person. However, if assets are still in the surviving parent’s name when they die, tax may be payable on inheritance received before anything is passed on to beneficiaries.

When the second parent dies, all assets form an estate. Most commonly, this includes properties, savings, investments, and possessions. Once collated, if the estate is worth more than the tax-free threshold, tax will likely be payable. In the UK, the nil-rate band sits at £325,000. However, there is also the option that any unused allowance from the first spouse can be passed onto the second. This means the allowance for a second parent can be much higher.

Once the inheritance tax limit has been reached, charges are normally around 40% of an estate.

Ways to Avoid Inheritance Tax After Your Second Parent Dies

The best way to reduce hefty inheritance tax costs is by financial planning.

  • Reduce inheritance tax through early financial planning.
  • Make sure both parents’ tax allowances are fully used.
  • Create clear, up-to-date wills that outline all assets and help maximise available reliefs.
  • Consider passing larger assets, such as the family home, to direct descendants where larger tax-free allowances may apply.
  • Review the estate’s value regularly to plan for options such as trusts or gifting.
  • Check how assets are legally owned, as ownership structure can affect how they pass to beneficiaries.
  • Plan while the surviving parent is still alive, as many tax planning options may not be available later.
  • Avoid leaving decisions too late, as this can result in higher tax bills and reduce what loved ones inherit.

How Can an Accountant Help With the Process of Managing Inheritance Tax?

Working with an inheritance tax specialist is the best way to plan for the future. These professionals will help you to understand:

  • Current value of assets and the overall estate
  • Check transferable allowances
  • Review wills and ownership structures
  • Advise on gifting
  • Maintain clear records of financial movements

 

Taking a considered approach is the best way to eliminate additional stress at an already tough time. If you would like to understand more about avoiding inheritance tax traps, get in touch with the Hysons team.

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