Planning to Reduce Inheritance Tax
We look to reduce our clients’ potential inheritance tax bill by careful, legitimate planning. We are able to reduce the potential tax burden in almost every case we see, by making use of all the government allowances, considering the use of Trusts, exemptions and gifts and writing a well constructed Will.
Each individual has their own nil-rate band (currently £325,000). Any unused balance of the nil-rate band may be claimed by the surviving spouse’s executors on their death. This means that there is, potentially, £650,000 that can pass free of tax on the death of the second partner.
From April 2017, a new tax-free allowance of £100,000 (rising to £175,000 by 2020/21) will give each individual an additional allowance that can be used against the equity in their home, provided they leave it to their children (including step, foster or adopted) or grandchildren. This new allowance can be transferred to a spouse or civil partner, if it isn’t used up on the first death.
This means that, when added to the existing £325,000 individual allowance, a couple will be able to leave £1 million without paying inheritance tax by 2020. The new allowance is tapered away when a couple’s estate exceeds £2m.
Inheritance Tax can be reduced, or even eliminated, with proper planning and we can recommend to you a number of specialists in this area.
Please call us on our Freephone number 0800 7999761 for more information.
Paying Inheritance Tax after Death
In most cases Inheritance Tax (IHT) is due within six months of a person’s death, with interest added by HM Revenue and Customs thereafter. Consequently our speed in dealing with these matters is of huge benefit.
To establish whether Inheritance Tax is due it is necessary to value the Estate. This is done by adding up all assets such as property, possessions, money and investments and then deducting the deceased’s debts (including household bills and funeral expenses). Any exemptions, reliefs or tapering are then applied. It can be a complex process and we pride ourselves in dealing with it efficiently.
IHT has to be paid before a Grant of Probate is released. We can organise this from existing investments or accounts, or making bespoke arrangements with the HMRC.