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Inheritance Tax Planning in Belgravia: Safeguarding Wealth in London’s Most Prestigious Neighbourhood

  • Belgravia Capital
  • Jun 12
  • 5 min read

Updated: Jul 2


Inheritance tax advice in Belgravia

From its grand white stucco terraces to its immaculate garden squares and discreet mews houses, Belgravia remains one of the most desirable addresses in the world.


Nestled between Knightsbridge, Chelsea, and Westminster, this iconic London neighbourhood is synonymous with wealth, prestige, and exclusivity.


But with success comes complexity. For many families living in Belgravia, the single greatest financial risk they now face is not investment volatility, but inheritance tax (IHT).


With property prices routinely exceeding £5 million, and many households holding significant UK and international wealth, Belgravia families are often exposed to some of the highest inheritance tax liabilities in the country.


At Belgravia Capital Wealth Management, we specialise in helping families and international clients in Belgravia structure their estates to protect their wealth and preserve their legacy.


In this guide, we explain why inheritance tax is such a pressing issue in Belgravia; and how you can take control of it.



Why Inheritance Tax Is a Major Concern in Belgravia


Inheritance tax thresholds have been frozen since 2017:


  • Each individual has a £325,000 nil-rate band.

  • An additional £175,000 residence nil-rate band applies if you leave your main home to children or grandchildren.

  • Married couples and civil partners can combine these allowances — giving up to £1 million tax-free inheritance.


But if your estate exceeds £2 million, the residence nil-rate band starts to taper, disappearing entirely at £2.35 million.


In Belgravia, this taper is all but guaranteed:


  • Properties on Eaton Square, Belgrave Square, and Chester Square frequently sell for £10 million to £40 million+.

  • Mews houses and smaller flats in Wilton Crescent, Lowndes Square, and around Elizabeth Street regularly exceed £2 million to £5 million.

  • Many families hold significant international assets, large pensions, and high-value collections.


As a result, almost all Belgravia estates are now exposed to substantial inheritance tax liabilities, often running into seven figures.


A Typical Belgravia Inheritance Tax Example


Consider a family owning a £15 million home on Eaton Square. They also hold:


  • £5 million in international investments.

  • £2 million in UK pensions.

  • £3 million in art, jewellery, and personal possessions.


Their total estate is worth £25 million.


Because it exceeds £2.35 million, the residence nil-rate band is lost, leaving just £650,000 nil-rate band available.


This means £24.35 million is taxable at 40%, resulting in a potential inheritance tax bill of £9.74 million.


Without planning, this liability could force the sale of the family home or prized collections.


Why Belgravia Families Must Plan Proactively for Inheritance Tax


Families in Belgravia face unique inheritance tax dynamics:


  • Asset-rich but liquidity-poor, with wealth tied up in property, art, and collections.

  • Many estates include UK and international assets, increasing complexity.

  • Estates often involve blended families or multi-generational structures.

  • Many residents are non-domiciled or have international tax considerations.

  • Properties are often intended to be preserved within the family for generations.


Without proactive planning, families risk losing a significant portion of their estate to inheritance tax.


At Belgravia Capital Wealth Management, we work with UK and international families in Belgravia to structure their estates intelligently, ensuring their wealth is protected.


Key Inheritance Tax Planning Strategies for Belgravia Families


Lifetime Gifting


Lifetime gifting is one of the most effective ways to reduce your taxable estate.


  • You can give away £3,000 per year tax-free and carry forward one unused year.

  • Small gifts of up to £250 per person per year are also exempt.

  • Larger gifts are treated as potentially exempt transfers, provided you survive seven years, they fall outside your estate.


In Belgravia, we often help families gift:


  • Surplus income - tax-free if structured correctly.

  • Cash and investments.

  • Shares in family companies.

  • Art, jewellery, and valuable personal items.

  • Interests in international property.


Strategic gifting can reduce estate value below key tax thresholds and preserve allowances.


Using Trusts to Protect Wealth


Trusts are a powerful tool for moving assets out of your estate while maintaining control.


Common structures include:


  • Discretionary trusts - offering flexibility across generations.

  • Bare trusts - for direct gifts to adult children.

  • Interest-in-possession trusts - providing income for a surviving spouse while protecting capital for children.


Trusts are especially valuable in Belgravia for:


  • Protecting family homes and international property.

  • Managing complex family structures.

  • Preserving art, jewellery, and collections.

  • Ensuring long-term control over how wealth is passed on.


Whole-of-Life Insurance to Provide Liquidity


A whole-of-life insurance policy, written in trust, provides a tax-free payout to cover inheritance tax.


For many Belgravia estates, where wealth is concentrated in property and illiquid assets, this is an essential planning tool.


The insurance payout ensures that heirs can pay HMRC without selling:


  • Family homes.

  • Art or jewellery collections.

  • International property.


Pension Planning


Pensions offer major inheritance tax advantages:


  • Defined contribution pensions sit outside your estate for IHT purposes.

  • If you die before age 75, pensions can be inherited tax-free.

  • If you die after 75, beneficiaries pay income tax on withdrawals, but no IHT.


We frequently help Belgravia families:


  • Optimise pension death benefit nominations.

  • Structure pensions for international heirs.

  • Use pensions strategically alongside other assets to manage inheritance tax.


Business Property Relief (BPR)


If you own a qualifying business or AIM-listed shares, you may be eligible for Business Property Relief, reducing IHT on those assets by up to 100%.


From April 2026, BPR will be capped at £1 million per person, so now is the time to plan.


Many Belgravia families hold:


  • UK private businesses.

  • Interests in international companies.

  • AIM-listed investment portfolios.


We advise on structuring these assets effectively within your estate plan.


Common Inheritance Tax Mistakes to Avoid


Many Belgravia families make the same inheritance tax mistakes:


Underestimating estate value


It is common to overlook:

  • The current value of Belgravia property.

  • International bank accounts and investments.

  • Art, jewellery, and collections.

  • Life insurance not held in trust.



Outdated wills


Older wills may not reflect modern IHT allowances or the needs of international families.


Ignoring the £2 million taper

With careful planning, estates close to this threshold can retain valuable reliefs.


Holding life insurance outside trust

This unnecessarily increases your taxable estate.


Failing to optimise pensions

Pensions are a powerful and often underused IHT planning tool.


Why Local Expertise Matters for IHT advice in Belgravia


Belgravia presents unique inheritance tax challenges:


  • Exceptionally high property values driving large IHT liabilities.

  • Complex international wealth structures.

  • Multi-generational family estates with legacy homes.

  • High concentration of non-domiciled and international clients.

  • Sensitivities around preserving art, jewellery, and property collections.


At Belgravia Capital Wealth Management, we provide bespoke inheritance tax planning specifically for Belgravia families.


We understand:


  • The local property market.

  • The nuances of UK and international family wealth.

  • How to integrate UK inheritance tax planning with cross-border estate planning.


Next Steps for Belgravia Families wanting to mitigate Inheritance Tax


If you own a high-value home in Belgravia, particularly in:


  • Eaton Square.

  • Belgrave Square.

  • Chester Square.

  • Wilton Crescent.

  • Lowndes Square.

  • Elizabeth Street and surrounding areas.


… your estate is almost certainly exposed to inheritance tax.


Now is the time to act:


  • Have your full estate professionally valued.

  • Review and update your will.

  • Consider lifetime gifts and trust structures.

  • Explore insurance options to provide liquidity.

  • Optimise pensions for maximum tax efficiency.

  • Plan around upcoming Business Property Relief changes.


Conclusion: Protect Your Belgravia Legacy from Inheritance Tax and HMRC


Inheritance tax is no longer an issue for only the ultra-wealthy, it is a mainstream risk for most families in Belgravia.


But with expert, proactive planning, you can ensure your wealth passes to those you care about, not to HMRC.


At Belgravia Capital Wealth Management, we help Belgravia families take control of inheritance tax with clarity and confidence.


Contact us today to begin protecting your family legacy.


020 3916 5954

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