Inheritance Tax Planning


Inheritance Tax (IHT) used to be an issue only for the very wealthy but due to the rise in property values over the last 20 years more individuals have assets in excess of the Inheritance Tax threshold.

Inheritance Tax is the tax paid on your estate when you die. It can also apply to your estate especially if you transfer some or all of it into a trust. Inheritance Tax is currently at 40% and is currently paid on your worldwide assets above the Inheritance Tax threshold which is currently £325,000 per person. This allowance may change in the future and is subject to the Chancellors budget each year.

In order to plan effectively for Inheritance Tax it is always advisable to make use of your annual allowances and exemptions and careful planning can reduce the amount of Inheritance Tax payable on your estate.

As part of the personal financial review we conduct on our clients we will conduct a review of your assets and estate and any current Inheritance Tax liability and advise you on the most suitable Inheritance Tax planning to help mitigate any potential tax liability.

There are many ways in which to look at mitigating any potential liability including the use of trusts, wills, life assurance policies and lifetime gifts.

From 6 April 2017, an Inheritance Tax residence nil-rate band was introduced in addition to the standard nil-rate band. It’s currently worth up to £175,000 for the 2020/21 tax year. It starts to be tapered away if an Inheritance Tax estate is worth more than £2 million on death. Unlike the standard nil-rate band, it’s only available for transfers on death. It’s normally available if a person leaves a residential property that they’ve occupied as their home outright to direct descendants.

The FCA does not regulate taxation.

The Financial Conduct Authority does not regulate taxation, trust or will advice.

Levels, bases of and reliefs from taxation may be subject to change and their value depends on the individual circumstances of the investor.

The value of investments can go down as well as up and you may get back less than the amount invested. Past performance is not a guide to future performance.