Inheritance tax (IHT) is a tax that is paid on the value of your assets when you die (known as your estate). This includes everything owned in your name, eg. Your home, the value of any investments, trusts and certain gifts. Anything that the deceased person owes is then set against this value eg. Mortgages, loans etc.
Inheritance tax is payable if the total value of the assets exceeds the nil rate band. The current threshold or nil rate band is £325,000 for individuals and £650,000 for married couples or those in a civil partnership. Where your home is passing to children and grandchildren (including step children) you may also be able to claim a residential nil rate band currently £150,000 per individual (due to increase to £175,000)
Planning now, allows you to consider any further reliefs and exceptions that may apply to limit any tax implications. These could include:
- Making a Will
- Making gifts
- Reviewing asset ownership
- Minimising your estate
- Considering marriage (or civil partnership?)
- Using Trusts
- Certain reliefs such as agricultural and business.
Inheritance and tax planning is a complex area of law and our team use plain English to make certain you understand any decisions that are made.
Alison Bristow is STEP (Society of Trust and Estate Practitioners) qualified.
Please call our team if you would like to discuss if any of the above would be helpful in your circumstances and to see if we can help.