Inheritance Tax Planning
Inheritance Tax (IHT) is the tax levied on the value of an estate on death if it exceeds the nil rate band. Your estate is the value of all your assets e.g. house, investments, car, furniture, cash etc.The current nil rate band for the tax year 2008/2009 is £312,000. This is the first slice of your estate which is taxed at 0% hence the name nil rate band. The value of everything you own above this amount is taxed at 40%. IHT normally has to be paid within 6 months of death otherwise interest is charged on the amount owing.
Given that many homes are now valued in excess of the nil rate band IHT is no longer a tax affecting only the wealthy.
There are many methods of reducing the liability that your beneficiaries may need to find and planning is essential. Doing nothing is not an option if you wish to save IHT.
Planning methods can include any, or a combination, of the following:
• Holding properly drafted Wills
• Making use of exempt beneficiaries
• Making use of exempt transfers
• Ensuring Life policies are written in Trust
• Placing funds in Trust
• Potentially Exempt Transfers
Solutions are individual and we can provide bespoke expert independent financial advice to help you reduce the IHT your family may need to find. Please telephone for a confidential review.
Please note that trust and tax advice is not regulated by the Financial Services Authority.
