Inheritance Tax Planning in Mayfair: Preserving Generational Wealth in London’s Luxury Core

Belgravia Capital
Jun 20
4 min read

Mayfair is London’s ultimate symbol of enduring wealth and heritage. With its manicured squares, Georgian mansions, and discreet family offices, it is the chosen home for high-net-worth and ultra-high-net-worth individuals from around the globe.

But behind the grandeur of Mount Street townhouses and Grosvenor Square penthouses lies a growing challenge: inheritance tax (IHT).

With property values soaring and wealth often spread across international assets, Mayfair families are exposed to significant tax liabilities - unless strategic planning is put in place.

At Belgravia Capital Wealth Management, we help Mayfair residents protect their estates, minimise tax burdens, and secure their legacies for generations to come.

Why Mayfair Estates Face High Inheritance Tax Exposure

Inheritance tax in the UK is charged at 40% on estates exceeding the available thresholds:

£325,000 per person (nil-rate band)
£175,000 residence nil-rate band (for property passed to direct descendants)
Combined allowances of £1 million for married couples or civil partners

However, estates valued above £2 million begin to lose the residence nil-rate band. By the time the estate hits £2.35 million, it’s lost entirely and only the basic £650,000 (for couples) applies.

In Mayfair, almost every property breaches this threshold:

Apartments in Grosvenor Square – £10m to £40m
Townhouses on Charles Street or Curzon Street – £15m to £60m
Off-market estates – £100m+

That’s before you factor in investment portfolios, global real estate, art collections, luxury cars, and private company shares.

The result? Even moderately structured estates can generate IHT bills in excess of £5 million.

Real-World Example: IHT on a Mayfair Family Estate

Consider a Mayfair family with the following assets:

£25 million townhouse on South Audley Street
£5 million global investment portfolio
£3 million in private art and antiques
£2 million held in pensions
£1 million cash and other liquid assets

Total estate: £36 million

With no reliefs beyond the basic nil-rate band, the taxable estate is £35.35 million, resulting in an IHT bill of £14.14 million, unless advanced planning is implemented.

What Makes Mayfair Inheritance Tax Planning Unique?

Mayfair’s wealth structures are rarely simple. Most clients in this postcode face at least one of the following complexities:

Non-domiciled status
Cross-border assets and tax exposure
Trusts, holding companies, and family offices
Art collections and high-value chattels
Multiple heirs and intergenerational ownership structures

Inheritance tax planning here isn’t about basic thresholds; it’s about working within a global, discreet, and highly bespoke framework.

Five Key Strategies for Mayfair IHT Planning

Utilising Lifetime Gifting

While many Mayfair families intend to pass assets on after death, doing so during your lifetime, through potentially exempt transfers (PETs), can remove assets from your estate entirely, if you survive 7 years.

Even better: some clients gift surplus income annually under HMRC’s “normal expenditure out of income” rules - a powerful tool for reducing IHT liability without sacrificing lifestyle.

Trust Structures

Mayfair clients frequently use UK and offshore trusts to:

Ring-fence family homes and assets
Preserve wealth across generations
Maintain control over distributions
Plan around potential divorce, incapacity, or creditor issues

We work closely with specialist trust and legal advisers to ensure these are structured to reflect both UK tax rules and the client’s global asset footprint.

Life Insurance for Liquidity

Whole-of-life insurance policies, when written in trust, offer Mayfair families a clean, tax-free solution for paying large IHT bills, without disrupting asset ownership.

This is especially useful when estates are:

Illiquid (e.g. luxury property or art)
Intertwined with long-term family plans
Involved in legal or offshore structures

Premiums are often paid using surplus income, which can be further optimised within a larger IHT plan.

Pension and Retirement Asset Planning

Pensions remain outside the scope of inheritance tax, a critical opportunity for families with large SIPPs or international pensions.

We ensure Mayfair clients:

Nominate appropriate beneficiaries
Coordinate pensions with trusts and other assets
Use pensions strategically to reduce IHT exposure elsewhere

Domicile and International Structuring

Many Mayfair families have non-UK domiciled status or complex global tax considerations.

We collaborate with international legal experts and tax planners to navigate:

Domicile reviews
Offshore trust reviews
Overseas property structuring
Double taxation treaties

The right structure can save millions; the wrong one can create unexpected exposure.

Why Work With Belgravia Capital for Inheritance Tax Planning?

We are not generalists. At Belgravia Capital Wealth Management, we work exclusively with high-net-worth and ultra-high-net-worth families in London’s most prestigious districts.

Clients in Mayfair choose us for our: