Contact our Lifetime Planning and Wills Team on 01225 755656. Alternatively, you can email them or complete the Contact Form at the foot of this page.
Inheritance Tax Planning
With the threshold currently £325,000, many estates fall liable to Inheritance Tax (IHT). But through simple estate planning, including taking advantage of the reliefs and exemptions available, you can reduce or even eliminate your estate’s IHT liability.
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Our specialist team will discuss with you potential planning opportunities, including:
IHT annual exemption
Using your IHT annual exemption, you can give away £3,000.00 per annum tax free (£6,000.00 if you have not used last year’s exemption). And there is no required survivorship period.
Gifting money to family members
Whatever the nature or size of the gift, if it was made more than seven years before you die, it’s exempt from IHT. In addition, for gifts made between three and seven years before you die, ‘taper relief’ may apply. So, if your estate is chargeable for IHT, it’s paid at a reduced rate.
Getting married or entering into a civil partnership
Leaving your estate to your long-term partner means IHT will be charged on your death and again on their death. However, if you marry them, the spousal exemption applies. Accordingly, however large, the whole of your estate passes tax-free on your death. And that applies even if you die within a few days of the marriage or civil partnership.
You might consider investing in assets qualifying for IHT relief. Specifically, some business and agricultural assets attract 100% relief from IHT after two years of ownership. So, this can prove worthwhile if, for example, there is a fair chance of surviving two years but not seven. However, the attractiveness of the relief will need to be counterbalanced by the degree of investment risk. But ultimately, you must take expert advice.
Residence nil rate band
Due to increasing property values, many people have drifted into the IHT net. So, to soften the blow, in addition to the IHT standard nil rate band (currently £325,000), the Government introduced a residence nil rate band (RNRB) in 2017.
The RNRB is available when you leave your home to direct descendants. Initially set at £100,000, the RNRB increased by £25,000 annually until it reached £175,000. In the same way as the standard nil rate band, any unused RNRB on the first death of a married couple or civil partners is potentially transferable. Consequently, for a married couple, this means that on the second death, the estate may potentially benefit from a total nil rate band of £1 million.
Life Insurance Policies
You should ensure that any life insurance policies are properly in trust. In addition, check that nomination forms for any pension death in service benefits are in place and reflect your current wishes and circumstances.