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Inheritance Tax and Estate Planning

Financial success isn't about how much money you have, but being able to enjoy life to the full.

Inheritance Tax and Estate Planning

Estate Planning is much more than paying inheritance tax on the death of a loved one. Some want to provide for the next generation or leave money to a charity when they die, others want to ensure that HM Revenue & Customs won’t be the biggest single beneficiary of their estate when they die. Below are a few solutions our qualified specialist succession planning strategy experts can help with.

What is Inheritance Tax (IHT)?

  • It is a tax charged on any part of your estate that exceeds your personal allowance called the Nil Rate Band (NRB), which is currently fixed at £325,000 until April 2021.
  • Inheritance tax is most commonly paid on the transfer of an individual’s estate on death but can also be due on some lifetime transfers.
  • It is currently charged at a rate of 40% on the value of all worldwide assets, less any reliefs and exemptions, that exceed the NRB of £325,000 for an individual and £650,000 for a couple.

Residence Nil Rate Band

In April 2017 the government introduced the Residential Nil Rate Band (RNRB) it is an additional allowance for passing on the family home to direct decedents (child, step-child, adopted child or foster child) and lineal descendants.

The current allowance is £150,000 for 2019 to 2020. It will increase to £175,000 in 2020 to 2021, it will then increase in line with Consumer Price Index (CPI).

It has some complicated rules; for larger estates the allowance is reduced, and it cannot be used against buy to let property. There are other qualifying factors and our financial adviser can go into further details with you.

What is liable to IHT?

Anything that has a value; possessions such as money, property, art, classic cars etc.

Control over how and when your money is passed on

Having a succession planning strategy and plan in place ensures that you preserve and protect the assets you have worked hard to build up.

We can help you:

  • Review your current circumstances
  • Calculate the potential IHT liability your heirs will face
  • Create a plan and strategy for passing your assets on, the way you want

Importance of a Will and Estate Planning

It is important to ensure your Will is up to date. Having a Will ensures your wishes are carried out after your death. We can review your Will and where necessary refer you to a specialist solicitor.

Possible solutions

  • Make outright gifts
  • Make gifts in trust
  • Insuring to mitigate any potential Inheritance Tax liability
  • Keep your assets while reducing the size of your estate
  • Manage Inheritance Tax without making gifts
  • Business Relief
  • Will or Living Trust

It is not usually one solution but a combination of options that are best suited to an individual's needs which is why when you call to discuss your need for inheritance tax planning advice we take the time to discuss your needs and introduce you to one of our hand-picked local trusted IFA's with a specialism in IHT planning.

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