If you or your father were born or raised in Britain, you are likely to be deemed domiciled in Britain. If your worldwide estate is worth more than the £325,000 nil rate IHT band, it may be at risk of IHT.

Domicile is entirely different to residency. Don’t make the mistake of thinking that because you’re a tax-free resident in the UAE for example, that you aren’t liable to UK IHT!

A higher threshold – including a family home allowance – is being phased in. This will be worth an extra £100,000 per estate in 2017-18 – rising to £175,000 by 2020. However, if your estate is worth more than £2m, you start to lose this new tax relief at a rate of £1 for every £2 over the limit.

From 2020, when the full allowance is in place, as soon an estate has reached £2.35m (£2.7m for couples) it will lose all the new home allowance relief. This affects those leaving everything to their spouse/partner, which tends to be the most common arrangement among Britons.

If a couple has an estate worth £1.5m each and one dies, the surviving partner would end up with a £3m estate – which wipes out their home allowance benefit. To avoid this situation, you can pass assets on to other beneficiaries on the first death, such as children or grandchildren. This reduces the total estate size, and maximises the family home allowance.

The nil-rate band above which IHT becomes an issue is currently £325,000 per person (£650,000 per couple). The nil rate bands of surviving spouses/civil partners may be increased by unused bands of deceased partners. The new home allowance means that from 2020, married couples/civil partners will be able to pass on estates worth up to £1m to their direct descendants (typically children/ grandchildren).

 Those who sell an expensive property to downsize or pay for care home fees, for example, can still qualify for this new threshold if most of their estate is left to their direct descendants.

Stuart Ritchie suggests a few things to help mitigate IHT:

Gifting. You can gift assets to anyone. As long you survive for seven years, your gift will be free of IHT. You can also take out insurance in case you don’t survive for seven years.

Discretionary trusts. These can be used if you want to retain control over your assets, but remove them from your estate for IHT purposes. They are often used by parents/grandparents. Beneficiaries and terms of discretionary trusts can be changed by the trustees. As with gifting, the ‘settlor’ (the person placing the assets in trust) needs to survive seven years for those assets to move entirely out of their taxable estate.

An absolute or bare trust. No tax is payable when assets go into such a trust. However, they are relatively inflexible as beneficiaries cannot be altered.

To avoid IHT headaches, get a will that is valid. Make an appointment with a lawyer to get your will(s) drafted. Each of your wills need to be valid for the country you live in, and where your assets are held.