Inheritance Tax Planning
Protecting your Assets from Inheritance Tax
Effective inheritance tax planning could save your beneficiaries thousands of pounds, maybe even hundreds of thousands depending on the size of your estate. At its simplest, inheritance tax (IHT) is the tax payable on your estate when you die if the value of your estate exceeds a certain amount.
Current thresholds
IHT is currently paid on amounts above £325,000 (£650,000 for married couples and registered civil partnerships) for the current 2010/11tax year, at a rate of 40 per cent. If the value of your estate, including your home and certain gifts made in the previous seven years, exceeds the IHT threshold, tax will be due on the balance at 40 per cent.
Without proper planning, many people could end up leaving a substantial tax liability on their death, considerably reducing the value of the estate passing to their chosen beneficiaries.
What does an estate include?
Your estate includes everything owned in your name, the share of anything owned jointly, gifts from which you keep back some benefit (such as a home given to a son or daughter but in which you still live) and assets held in some trusts from which you receive an income.
Against this total value is set everything that you owed, such as any outstanding mortgages or loans, unpaid bills and costs incurred during your lifetime for which bills have not been received, as well as funeral expenses.
Independent Inheritance Tax Planning Advice
There are many ways to reduce your inheritance tax bill.
To get independent inheritance tax planning advice speak to one of our advisors today.
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