Leave them a little more
Inheritance tax planning may not be the first thing on your mind, but careful consideration of your financial affairs now could save your loved ones money and worry later.
Your estate might consist of properties, possessions and money, including some pensions. IHT is due on anything over the value of £325,000, unless you choose to leave everything above this threshold to your spouse, civil partner, a charity or community amateur sports club.
We will help you to make the best choice for you and your chosen beneficiaries, minimising the amount of tax due and ensuring as much of your money goes to the people and organisations that you choose as possible.
Providing for the next generation
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 entirety of your estate. 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.
We can advise you on the best way to keep your IHT bill as small as possible, whether you want to divide your estate between a number of individuals, leave everything to your partner, or make a charitable donation.
Choosing your legacy
If you make any lifetime gifts or transfers within the seven years prior to your death, these may become taxable, 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.
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%.
Our inheritance tax planning and estate planning services will make sure your loved ones and chosen beneficiaries are well taken care of when the time comes.