Planning now will save your family money in the future.
That is why we have an array of friendly and personable staff, who excel in their chosen fields. They come with expert knowledge and innovative thinking to ensure you leave your family in the best position at the time of your passing.
Poor planning can result in Executors paying out huge sums of money from your estate to pay IHT, yet with careful planning this can be significantly reduced and, in some cases, avoided altogether.
Inheritance Tax is due when a person’s estate (their property and possessions) is worth more than £325,000 when they die. This is called the ‘Inheritance Tax threshold’. The Tax is applied at 40% on the value of the estate over the Inheritance Threshold.
There are a number of factors to be considered when carrying out estate planning, these include:
Reduction of IHT rate from 40% to 36% when you leave more than 10% of your estate to charity.
There are several things that can account as an individual’s assets, they range from:
- Cash in banks and ISAs
- Property and much more.
Ways you can reduce Inheritance Tax
Inheritance Tax is avoidable, this SHOULD NOT be confused with tax evasion. There are various legal ways to avoid Inheritance Tax which should not be seen as a ‘work around the system’ but rather, comprehensive and sensible ways to safeguard your assets and future legacy.
These can include:
Gifts are a good way to re-direct some of your financial assets provided you can afford to do so. You can gift away up to £3,000 during a tax year, also known as ‘annual exemption’.
Wedding gifts are also ways to release some of your financial equity, you can gift your child £5,000 for their wedding which is completely tax-free. You can do the same for a grandchild up to the value of £2,500 and £1,000 to any other relative.
You can also donate to charity; gifts to charities and political parties have no tax amounts due to them.
You may give unlimited gifts of £250 each year, provided they are not to the same person.