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Inheritance Tax Planning and Advice

Inheritance tax, or IHT, is paid on the estate of someone who has died. The estate could consist of properties, possessions and money that belonged to the deceased, including some pensions. IHT is due on anything over the value of £325,000, unless you leave everything above this threshold to your spouse, civil partner, a charity or a community amateur sports club.

Inheritance tax planning

If you choose to leave your home to your children (including adopted, foster and stepchildren) or grandchildren your threshold could increase to £475,000. And if you’re married or in a civil partnership and your estate is worth less than your threshold, any unused threshold can be added to your partner’s threshold when you die, meaning their threshold could be as much as £950,000.

The current standard inheritance tax rate is 40%, and is only charged on the part of your estate that’s above the threshold, not the entire thing. You may be eligible to pay a reduced rate of 36% on some assets if you leave 10% or more of the ‘net value’ to charity in your will.

Lifetime transfers & IHT

Unfortunately, some lifetime gifts and transfers may become taxable on death if made within the previous seven years, although the amount of tax due decreases thanks to ‘taper relief’. If the gift was made 6-7 years before death the tax will be reduced by 80%, but if it was made within the past three years the full 40% tax will be due.

Business relief for inheritance tax

If your will includes ownership or a share of a business, this will be included in the estate for inheritance tax purposes. Business relief could reduce the tax owed on some of an estate’s business assets by either 50% or 100%.

Inheritance tax advice

Our inheritance tax planning advice service covers everything from standard exemptions and reliefs, chargeable lifetime transfers and estate planning services, to overseas domiciled spouse/civil partner exemption and downsizing relief. Our team of specialist inheritance tax accountants will discuss your circumstances and find out what you want to achieve, advising you on the best options for you and your chosen beneficiaries.

Next steps

Get in touch to find out how our inheritance tax experts could help you by ensuring your loved ones don’t lose their inheritance to the taxman. Call us on 0114 274 7576 or email bestadvice@knowleswarwick.com.

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