Estate Planning

Help your children inherit more and give them the best future possible.

Speak with one of our chartered financial advisers – we'll explain how inheritance tax will impact your family and help you develop a plan to leave them more.

Estate Planning & Inheritance Tax

Inheritance tax is perhaps the most disliked of all taxes. People having worked hard and paid income tax and capital gains taxes throughout their lives are then subject to perhaps the heaviest tax of all upon their death.

No wonder clients wish to reduce or even avoid paying ‘death duties’. Inheritance tax is considered a voluntary tax, because with the right planning the tax can certainly be reduced and even avoided.

Our financial advisers will explain how to help your children inherit more and give them the best future possible.

Many clients turn to us to help them with this essential part of their financial planning, knowing that it is often a complicated subject that can leave family members and loved ones paying significantly more in tax than necessary. We work hard to ensure your hard work passes from one generation to the next.

What is Inheritance Tax?

Inheritance tax applies to an individual’s total worldwide assets on their death. However not all of one’s estate is taxed, only that above the prevailing nil rate threshold which is currently £325,000 per individual. The cost of Inheritance tax is 40% on everything above this threshold making inheritance tax, potentially, the largest tax demand your children will ever face. 

Inheritance Tax Exempt Arrangements

You may wish to reduce an inheritance tax liability by considering gifting directly to family members or use the range of inheritance tax efficient trusts that are available. You may wish to consider inheritance tax exempt investments or make provisions for your children to have the means to pay the eventual tax bill through a Whole of Life Assurance. There may be charities or political causes you'd like to consider supporting, taking advantage of their exemption from inheritance tax.

With many options available careful consideration is needed in order to avoid 'the voluntary levy' in a way that complements not compromises your future. Our advisers will talk you through each of the relevant options and help you understand the benefits to you and your family.

Frequently Asked Questions about Estate Planning

Inheritance Tax is a tax on death. The tax is applied to your estate if its taxable value exceeds the individual exemption allowance of £325,000. Not all assets held within an estate are taxable as some assets are exempt from inheritance tax.

Assets that are subject to inheritance tax typically include your home, other property, land, deposit accounts, shares, investment funds, insurance bonds, jewellery, art and antiques. Any assets of a similar nature held abroad are also included in your taxable estate.

There is no inheritance tax charged upon transfers on death between married couples or civil partners. Each individual benefits from a current nil rate allowance of £325,000 and therefore couples have a joint allowance of £650,000. Any unused allowance can be transferred to the surviving spouse.

On top of the nil rate allowance, homeowners with children can benefit from the main residence nil rate allowance. This allowance starts at £100,000 per individual in 2017 and rises by £25,000 each year to £175,000 in 2020. This allowance only applies to the value of the family home when inherited by the home owner’s children.

Other exemptions are given to privately owned businesses and farms that if trading are exempt from inheritance tax.

The value of the taxable estate above the nil rate and main residence nil rate allowances is subject to a 40% tax charge. If a net taxable estate was worth £2 million after all allowances were deducted then the inheritance tax demand would be £800,000.

The inherited estate is liable to pay the inheritance tax. The liability must be settled or agreed to be settled with HMRC prior to the granting of probate and the estate distribution.

If there are insuffcient disposable assets in the estate then other assets will need to be sold to raise the capital.

The estate is required to pay inheritance taxes prior to the grant of probate and the distribution of estate assets to the beneficiaries of the will. Depending upon the nature of the assets, payment can be spread over a period of time. HMRC generally expect IHT to be paid within six months of death.

It is important that to ensure that your assets pass to the people you want them to then you should write a will. A will avoids your estate from being distributed in line with the intestacy rules and gives clarity to your family over your wishes.

Wills can always be changed, re-written or updated.

Areas of Inheritance Advice

  • Gifts 
  • Gift & Loan Trusts 
  • Discounted Gift Trusts 
  • Wealth Preservation Accounts 
  • Enterprise Investment Schemes 
  • Business Property Relief Schemes 
  • Alternative Investment Market Portfolios 
  • Pension Funds 
  • Whole of Life Assurance

Our Estate Planning Specialists

Chris Davies

Chartered Financial Adviser

Phil Johnson

Independent Financial Adviser

Kate White

Paraplanner Manager

Mandy Armstrong

Paraplanner and IT Manager

Need Advice

Contact us for any questions related to Estate Planning & Inheritance Tax, we will get back to you as soon as possible with the best solution.

Read our latest financial articles
President Donald Trump and Prime Minister Theresa May

With the publication of the government’s white paper - The plan for the UK’s Brexit, it now seems almost inevitable that there will not be a substantial break away from the EU when Brexit formally ...

Read More

Our eight portfolios outperformed their respective national benchmarks on 47 out of 50 occasions

This edition of the investment portfolios has been one of the most demanding with so many factors at play at one time. We have taken into consideration global inflation, interest rate rises, US tax...

Read More

Jerome Powell Chair of the Federal Reserve

2017 was a year of exceptional equity returns for investors as global growth was synchronised across developed and emerging economies. The combination of both low inflation and low interest rates h...

Read More

© Estate Capital 2014 - 2018. Registered in Wales No. 4688919. Authorised and regulated by the Financial Conduct Authority. Privacy Policy