Inheritance Tax
Sophisticated planning and expert legal advice are essential to make sure your estate is IHT efficient – particularly if you own businesses or foreign assets.
Efficient tax planning
Considered Inheritance Tax (IHT) planning is all about passing as much of your estate as possible to whom you want to receive it, rather than to HMRC. It is also about maintaining control and flexibility over any arrangements that are made.
There are a number of methods that can be used to help reduce the amount of IHT your family will have to pay and we can advise you on how to take advantage of the complex web of IHT reliefs and exemptions and maximise the inheritance you pass on to the next generation.
How can I protect my wealth?
IHT is currently charged on approximately 1 in every 25 estates.
Gifts and trusts can help to reduce the value of your estate and are often considered key strategies in helping you pass on as much of your wealth as possible to your family, therefore, the amount of IHT payable on death
Writing a Will
Creating a will allows you to clearly express your wishes regarding the distribution of your assets and property after you die.
Trusts
Setting up a trust provides a flexible and creative way to protect your assets in a tax-efficient way
Gifts
Gifting is a tax-efficient way of creating a dedicated investment fund for beneficiaries and potentially reducing the value of your estate for IHT purposes.
Get In Touch
Not sure where to start? Reach out to our friendly team for peace of mind and advice on the next steps.
Frequently Asked Questions
Inheritance Tax (IHT) is a tax on the value of the assets that you own – your estate – when you die. If you have a life interest or right to income in certain types of trusts, IHT can sometimes apply to these trusts’ assets as well. It can also be charged on any gifts to a trust that you’ve made in your lifetime.
IHT is taken from your estate before any assets are distributed between your successors. In some cases, certain assets might have to be sold to pay the tax. There are a number of reliefs and allowances that reduce the amount of IHT that your estate must pay.
The government has introduced an additional nil-rate band on top of the £325,000, known as the ‘residence nil-rate band’.The current residence nil-rate band is up to £175,000.
This means that if you give away the home you lived in before you died to your children (including adopted, foster or stepchildren) or grandchildren, they won’t have to pay IHT on the first £500,000 (£325,000 nil rate band + £175,000 residence nil-rate band) of its value if they sold it.
If you are a married couple or in a civil partnership then you can combine both your nil-rate bands, meaning that the first £1,000,000 of your assets, including your property are free from IHT.
*We can only advise on current law, and this is subject to change.
The first £325,000 of your estate is passed on tax-free. This allowance is called the Nil Rate Band (NRB). If your estate is worth less than this, it pays no IHT at all. This will change if you make any substantial lifetime gifts within 7 years before your death or reserve a benefit in the asset gifted.
