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.
Inheritance Tax is often a complicated subject that can leave family members and loved ones paying significantly more in tax than necessary. Our financial advisers will explain how to help your children inherit more and give them the best future possible. We will work with you to ensure your hard work passes from one generation to the next.
Inheritance Tax (IHT) can apply to the worldwide assets of UK citizens. However not all of your estate is taxed, only that above the prevailing Nil Rate Band Allowance and Main Residence Nil Rate Allowance. The Nil Rate Allowance is currently £325,000 per individual so a married couple can potentially benefit from £650,000 of joint exemptions. The main residence nil rate allowance starts in April 2017 at £100,000 per individual and rises to £175,000 by 2020.
The cost of Inheritance Tax is 40% on all taxable assets above these thresholds making Inheritance Tax potentially the largest tax demand your children will ever face.
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.