With increasing house prices, and people living longer, inheritance tax is likely to apply to more and more people.
The inheritance tax threshold for every individual is presently £325,000 – this means that on death, if the total value of everything you own (including the value of your home) falls above this threshold, inheritance tax is chargeable. The rate of inheritance tax is 40% of the amount by which the threshold is exceeded.
Many people regard the 40% rate of inheritance tax to be unfairly high, especially where people have worked hard, saved wisely, and have paid all their taxes throughout their lives; however, it applies to everyone.
What are the options?
It’s quite possible that with sensible advance planning, the burden of inheritance tax could be mitigated, or eliminated. There are various exemptions and reliefs against the charge to inheritance tax, and these should be used intelligently and with foresight.
Depending on the value and complexity of the taxable estate, and the practical needs of individual clients, suitable structures may include the use of trusts (domestic or off-shore) or other tax-efficient strategies.
How can we help?
When you instruct us, we will need some details about your assets. As part of your Wealth Check, if it looks as though the total value of your assets is likely to be above the inheritance tax threshold at your death, we’ll explain how much tax would be payable, and provide you with general advice.
We’ll also provide you with options as to any further specific advice that you might benefit from in relation to inheritance tax planning, together with what it’ll cost – you’ll then have the necessary information to decide how you’d like to proceed.