Doctors and dentists spend years building substantial wealth through property investment, pensions, private investments, and business interests. A common assumption many hold is that a married couple can pass on £1 million to their family without paying inheritance tax (IHT).
This does not constitute advice and advice should be sought in all instances before acting on it. The Financial Conduct Authority does not regulate tax advice. Tax treatment depends on the individual circumstances of each client and may be subject to change in the future. The Financial Conduct Authority does not regulate tax planning, estate planning, or trust planning.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.
This article was approved by Best Practice IFA Group Limited on 22 May 2026
While the figure itself isn’t wrong, it is heavily conditional. Unfortunately, many clinicians don’t discover those conditions until they make time to review their own estate in detail.
For medical and dental professionals, particularly those with NHS benefits alongside private pensions or practice ownership, that assumption could lead to a costly gap in planning.
Read on to learn more.
The Fine Print Many Families Miss
The way IHT is currently set up provides a standard nil-rate band of £325,000 per person, which has remained frozen since 2009 and is currently due to stay frozen until April 2031. There’s also a Residence Nil-Rate Band (RNRB) of £175,000 available when a qualifying family home passes to direct descendants. Together, this creates the often-quoted £1 million allowance for married couples or civil partners.
However, the full amount only applies if all conditions are met. Couples without direct descendants may lose access to the Residence Nil-Rate Band entirely, reducing combined allowances to £650,000.
Estates exceeding £2 million face a tapering of the RNRB, with the allowance reducing by £1 for every £2 above the threshold and disappearing altogether beyond certain levels. Blended family arrangements can also create complications if beneficiary structures are not aligned properly.
Understanding what this means matters because accumulated wealth can grow faster than many people realise — family home, ISA portfolio, retained company profits, private pension arrangements, and savings can push an estate into territory where allowances may start to reduce.
The 2027 Pension Changes Explained
There is also another major change on the horizon.
From 6 April 2027, most unused defined contribution pension funds and pension death benefits are due to be included within a person’s estate for IHT purposes. Until now, pensions have often been one of the most effective intergenerational planning tools because they generally sat outside the taxable estate.
Government estimates suggest approximately 10,500 estates will become liable for IHT for the first time, while a further 38,500 estates could see larger tax bills, with an average increase of around £34,000.
What Doctors and Dentists Should Consider Now
The NHS pension is a defined benefit arrangement, so it is expected to remain largely unaffected in many scenarios. However, private pensions, SIPPs, and additional defined contribution savings could become increasingly important in estate planning.
It’s always best to review your existing arrangements regularly and often. Here are a few things to consider during your evaluation:
- Calculating your estate’s true value, including pension assets, to understand if your estate could approach the £2 million taper threshold
- Reviewing your pension beneficiary nomination forms
- Determining the best gifting strategies
- Reviewing your Will and trusts to ensure they are up to date with your current circumstances and wishes
Lifetime gifting strategies, for example, can rely on seven-year rules, while other planning opportunities may take time to implement effectively. With timing becoming even more important, working with a financial advisor could help guide you through the process.
Planning Your Legacy with Greater Confidence
Estate planning is not just about reducing your tax liability; it is also about making sure your wealth passes to the people you intend, in the way you intend.
The experts at Dental & Medical Financial Services help doctors and dentists navigate complex inheritance tax planning with specialist advice. Get in contact to schedule time to meet with one of our advisors today.
