Passing on your wealth
People often put off Inheritance Tax advice as they believe the only way to mitigate the tax is to pay an insurance policy or give all their capital away, but this is a common misunderstanding. If you think Inheritance Tax may be an issue for you, here are some things to consider:
Value of your assets
You need to consider not just the value of your wealth today, but also how that may change and increase in future.
Your family's future needs
Prioritizing the needs of those who take over your assets is vital. Will a spouse or children have sufficient funds for any expenses?
Your own financial security
While moving assets into trust may reduce your liability, you need to first be sure that you will have sufficient income in retirement.
How we can help
Inheritance Tax is an essential consideration in good financial planning. We can provide you with the proper provisions to ensure you don’t pay any tax you could potentially be exempt from.
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Frequently Asked IHT Questions
Tax planning can often be very complicated and can vary considerably from one individual to the next. Below are some commonly asked questions regarding Inheritance Tax Planning, but feel free to contact us for more specific information on how you could be affected.
When should I plan for IHT?
If you think Inheritance Tax may be an issue to your loved ones, you need to look at your options to reduce that bill as soon as possible. IHT is currently payable where a person’s wealth is in excess of £325,000 (2017–18). Thus, if you own your own house and have some savings, life assurance policies, or business assets, your estate could be liable.
Do I need to have a will?
While having a will is not a legal requirement, it is highly recommended. The main benefit is that it enables you to decide who is in control of your estate when you die, and avoids delays due to laws of intestacy.
What is included in my Estate?
- Your main residence
- Bank accounts
- Investments
- Other Property (Buy-to-lets, Holidays homes etc.)
- Life Assurance that isn't in trust
How much Inheritance Tax will i pay?
IHT is charged at 40% of the net value of an estate that is more than the £325,000 nil-rate band. In simple terms, when you die, your debts are added up and taken away from what you own – your assets – to leave your net worth. If this is more than £325,000, IHT is paid at 40% on everything over that amount.
