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:
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:
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.
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