Personal
Inheritance Tax Planning
Personal
Everys Solicitors Inheritance Tax Planning Services
The current threshold at which inheritance tax (IHT) becomes payable on an estate is £325,000 for a single person. This is known as the nil-rate band. When a spouse or civil partner dies, their unused allowance can be transferred to their surviving partner. Provided they have not used up and exceeded their other allowances, a total of £650,000 may be passed on free of tax. IHT is then charged at a rate of 40% on the remaining estate.
The residence nil rate band provides an additional allowance of £175,000 per person which is added to their general nil rate band of £325,000, giving an individual a total allowance of £500,000, or a married couple jointly would have an allowance of £1,000,000 before inheritance tax is charged. The rules are precise, and it is important that advice is sought when drafting a will to ensure that various pitfalls are avoided. The family home must be left to direct descendants to qualify for this additional allowance.
There are restrictions on that additional nil band allowances for estates with a value over £2,000,000 on which we would be happy to advise.
Gifts made during a person’s lifetime and other transfers also have a significant impact on the available nil rate allowances on death, and care needs to be taken with such planning.
These rules are not straight forward. Advice should be sought to ensure that you take advantage of all the allowances available to prevent the taxman from taking what should rightfully be passed to your beneficiaries.
Contact one of our Private Client lawyers now to see how we can help you mitigate your liabilities through the use of various exemptions outside of the IHT threshold.
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Partner - Private Client
Tel: 01392 848949 (Exeter) / 01884 211033 (Tiverton)
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