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Inheritance Tax

Inheritance tax planning and advice is vital if you want to pay no more IHT than necessary.  There are numerous ways and means of reducing or even eliminating your inheritance tax bill which are often missed through thoughtless Will preparation.

We can look at ways of reducing the value of your estate for IHT purposes whilst always bearing in mind the implication for other taxes and your general financial circumstances.

There must be a sensible balance between reducing your future tax bill and not giving away too much.

Starting the planning process early allows you to see where you stand and what you need to do going forward. Everyone’s situation is different, and I will take the time to understand your circumstances and objectives and advise you accordingly.

The basics

Everyone has a basic tax-free allowance for inheritance tax known as their Nil Rate Band (NRB). The NRB is currently £325,000.  The first £325,000 of your estate can pass IHT free but after that, your estate will usually pay IHT on the remainder at 40%.

However, there is also second slice of IHT allowance, known as the Residence Nil Rate Band (RNRB).  This can be as much as a further £175,000 but there are some conditions before you can qualify for it and mistakes can easily be made to lose it. 

IHT is not payable on anything you leave to your spouse, civil partner or a charity and the unused part of your NRB can be transferred to and used by your spouse or civil partner when they eventually die.

The NRB is reduced by any lifetime gifts you have made within the last 7 years. So, for example if you gave away £100,000 the year before you die your NRB for the remainder of your estate is reduced to £225,000.

frequently asked questions

Common Inheritance Tax related questions answered

Inheritance tax is a tax that you might have to pay on your death, depending on the value of your estate. It is generally payable at 40% and if you have made gifts during the seven years before you die, these may be included in the calculations.

It is an Inheritance Tax allowance that everyone has. You don't pay IHT on the first £325k of your estate.

It is an extra slice of Nil Rate allowance on top of the basic £325k.  It can amount to an extra £175k IHT free, but there are conditions attached to its use.

Where spouses or civil partners don't use up their  Nil Rate Bands on first death, they can be transferred and used by the surviving spouse on their eventual death.

Apart from gifts to spouses / civil partners and charities, your estate pays IHT on gifts to everyone else.

Yes but if you die within 7 years of that gift, the value of the gift will be included when working out what IHT your estate pays.

Everyone is allowed to give away £3k per year and it doesn't matter how long you survive afterwards.  You can give away as much as you want over that amount, but for it to be ignored for IHT you have to survive 7 years.

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Areas I Can Help With

I have compiled a selection of frequently asked questions and answers related to wills and will trusts. If you have any questions that I haven’t covered, please get in touch and I’ll be happy to help.

Let's get started

Please get in touch to see how I can help

People often say that getting started is the hardest part of all. Because you are reading this, you should feel encouraged that you have already begun the process, and my job is to help you from here. Simply pick up the phone and call me or drop me a short email.