IHT planning

Pass more on to your loved ones

While it might seem morbid to talk about, when you die, your estate might be subject to inheritance tax, meaning your loved ones could receive less than you want them to, which makes inheritance planning essential. Plus, in some cases, it can leave grieving families worried about finances exactly when they shouldn’t have to be.

But with careful estate planning advice, you can reduce the total value of your estate to ensure you pass on more of your family wealth to your beneficiaries while minimising your inheritance tax liability. After you’re gone, we’ll process any inheritance tax bill that does have to be paid, before distributing what’s left to the people or causes closest to your heart.

We can advise on making gifts before you die. As long as you don’t retain control or benefit from the gift and you give it away more than seven years before your death, then no tax will be due, thanks to the seven year rule and potentially exempt transfer provisions.

You can also donate to charity to reduce your inheritance tax burden. Your donation will either be deducted from the value of your net estate before tax is calculated or reduce your inheritance tax rate entirely, if 10% or more of your estate is left to charity. If you crunch the numbers properly, you might find a way to protect your estate and pay less inheritance tax.

The standard inheritance tax rate is charged at 40% on the value of estates exceeding the inheritance tax threshold of £325,000, meaning anything below that tax free threshold won’t be taxed. If you have a main residence you want to pass on to direct descendants, like your children or grandchildren, you may be able to benefit from the residence nil rate band. Currently standing at £175,000, it essentially means you can pass on £500,000 tax free, which you can combine with your civil partner’s allowance if they pass away before you.

Inheritance tax planning is complex and the tax treatment depends on individual circumstances, including your marital status, whether you are in a civil partnership, and the value and type of assets passed on. Our financial advisers can help you navigate tax allowances, taper relief, and the seven year period rules, so you can make informed decisions about giving money, making certain gifts, and managing your estate value to reduce your potential inheritance tax liability liability.

Reach out

Reach out to one of our expert inheritance tax planning professionals today for your peace of mind and to ensure your estate planning is tailored to your needs, helping you to pay inheritance tax in the most efficient way possible.

Get in touch.