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I need more information about Inheritance Tax and Estate Planning

Inheritance Tax is payable if the deceased’s estate exceeds £325,000 (the Inheritance Tax Threshold).   For married couples and Civil Partners, there is the opportunity to transfer unused Threshold from the first death. Please see https://www.gov.uk/inheritance-tax/leaving-assets-spouse-civil-partner.

Tax is charged at 40% of the value over the Inheritance Tax Threshold (or 36% if 10% or more of the estate is left to charity). Please see https://www.gov.uk/inheritance-tax/giving-to-charity-to-reduce-an-inheritance-tax-bill.

Recently the Government announced that the Inheritance Tax Threshold would be increased, but only in respect of a persons main home.  This additional amount is known as the “Main Residence Nil Rate Band” and will be phased in as follows:

  • £100,000 in 2017 to 2018
  • £125,000 in 2018 to 2019
  • £150,000 in 2019 to 2020
  • £175,000 in 2020 to 2021

For further information:  https://www.gov.uk/government/publications/inheritance-tax-on-main-residence-nil-rate-band-and-downsizing-proposals-technical-note/inheritance-tax-on-main-residence-nil-rate-band-and-downsizing-proposals-technical-note

In addition to the Inheritance Tax Threshold and the Main Residence Nil Rate Band available on death, there are provisions in Tax Law which allow for some lifetime planning:

  • Each person may gift £3,000 each year with no Inheritance Tax consequences.
  • You may also gift any amount, and provided you live for 7 years following that gift, the gift will not be considered part of your estate on death (Potentially Exempt Transfer).  Please see  https://www.gov.uk/inheritance-tax/gifts
  • Any gift to a charity or a spouse or civil partner is exempt for Inheritance Tax.

Gifts to Trusts can reduce the overall estate on death, the law concerning trusts and taxation are complicated, but for an overview please see https://www.gov.uk/guidance/trusts-and-inheritance-tax

We are concerned to ensure that we understand your motives for any tax driven gifts/transfers. We are not authorised to give financial advice and recommend that you consult with an independent financial adviser on such issues. However,  we are happy to meet with you and your financial adviser together either at home or in the office to discuss your estate planning options.

At Hepburn Delaney, we offer an initial meeting which enables you to meet with us to talk about what help you require and to decide whether we are the right solicitors for you. The likely costs involved for advising you will be calculated on an hourly rate and will depend on the complexity of the advice you require.

To contact us, please:

Call us on 01442 218090

Send an email to info@hepburndelaney.co.uk

Click on the link to the right and Contact the Wills and Probate Team

The Advice

Inheritance Tax is payable if the deceased’s estate exceeds £325,000 (the Inheritance Tax Threshold).   For married couples and Civil Partners, there is the opportunity to transfer unused Threshold from the first death. Please see https://www.gov.uk/inheritance-tax/leaving-assets-spouse-civil-partner.

Tax is charged at 40% of the value over the Inheritance Tax Threshold (or 36% if 10% or more of the estate is left to charity). Please see https://www.gov.uk/inheritance-tax/giving-to-charity-to-reduce-an-inheritance-tax-bill.

Recently the Government announced that the Inheritance Tax Threshold would be increased, but only in respect of a persons main home.  This additional amount is known as the “Main Residence Nil Rate Band” and will be phased in as follows:

  • £100,000 in 2017 to 2018
  • £125,000 in 2018 to 2019
  • £150,000 in 2019 to 2020
  • £175,000 in 2020 to 2021

For further information:  https://www.gov.uk/government/publications/inheritance-tax-on-main-residence-nil-rate-band-and-downsizing-proposals-technical-note/inheritance-tax-on-main-residence-nil-rate-band-and-downsizing-proposals-technical-note

In addition to the Inheritance Tax Threshold and the Main Residence Nil Rate Band available on death, there are provisions in Tax Law which allow for some lifetime planning:

  • Each person may gift £3,000 each year with no Inheritance Tax consequences.
  • You may also gift any amount, and provided you live for 7 years following that gift, the gift will not be considered part of your estate on death (Potentially Exempt Transfer).  Please see  https://www.gov.uk/inheritance-tax/gifts
  • Any gift to a charity or a spouse or civil partner is exempt for Inheritance Tax.

Gifts to Trusts can reduce the overall estate on death, the law concerning trusts and taxation are complicated, but for an overview please see https://www.gov.uk/guidance/trusts-and-inheritance-tax

We are concerned to ensure that we understand your motives for any tax driven gifts/transfers. We are not authorised to give financial advice and recommend that you consult with an independent financial adviser on such issues. However,  we are happy to meet with you and your financial adviser together either at home or in the office to discuss your estate planning options.

The Costs

At Hepburn Delaney, we offer an initial meeting which enables you to meet with us to talk about what help you require and to decide whether we are the right solicitors for you. The likely costs involved for advising you will be calculated on an hourly rate and will depend on the complexity of the advice you require.

The Next Steps

To contact us, please:

Call us on 01442 218090

Send an email to info@hepburndelaney.co.uk

Click on the link to the right and Contact the Wills and Probate Team