Inheritance Tax Planning

Inheritance Tax is a tax that is levied by the government when wealth is gifted either during your lifetime or on your death.

The current Inheritance Tax limit for the present tax year is £325,000 and this allowance is known as the Nil Rate Band. If the total value of your financial assets is more than the Nil Rate Band, it is possible that Inheritance Tax may be payable on the value of your assets over this amount. The rate of Inheritance Tax upon death is currently 40%.

From 6 April 2017, an additional nil-rate band of £100,000 will apply if you pass on a property, in which you have lived, to a direct lineal descendant. This ‘residence nil rate band’ (RNRB) is set to increase each year until 2021 when the total of your estate which you can pass on without paying inheritance tax will be £500,000 for individuals and a combined total of £1m for married couples or civil partners. If your estate is worth more than £325,000 when you die then it will generally be subject to inheritance tax. There are some exemptions to this including those surrounding your personal finances and circumstances. Our specialist solicitors can advise you on how to best structure your estate to enhance what your beneficiaries will receive.

Examples of Where Our Inheritance Tax Solicitors Can Help

We can advise you on the best way to structure your will to take full advantage of those tax exemptions relevant to your circumstances.

Transfers of money and assets between spouses and registered civil partners who permanently live in the UK are exempt from inheritance tax. If your spouse or civil partner dies without making full use of their inheritance or residence nil rate bands (RNRB) then you can apply to transfer their unused proportion to your estate.

Gifts to charity are also exempt from inheritance tax. If you choose to leave at least 10 per cent of your estate to charity then you can take advantage of a reduced rate of inheritance tax (from 40 per cent down to 36 per cent).

If you have a trading business or agricultural property/business then you may be able to take advantage of further inheritance tax reliefs that apply for these types of assets.

Our specialist team can also advise you on the tax exemptions available during your lifetime which will reduce the size of your estate on your death and thus your estate’s liability for inheritance tax. For example, every person is allowed to give away money or assets to the value of £3,000 each year as well as making small gifts of £250 every year to individuals.

Tailored Inheritance Tax Advice

Our expert solicitors can provide you with tailored inheritance tax advice to suit your needs and help you take advantage of the exemptions available to reduce your tax liability and maximise your estate.