Inheritance tax
Gone are the days when IHT only affected the wealthy. It will undoubtedly come as a shock to many to discover that a large proportion of their wealth - either in the form of the family home, investments or even old family heirlooms - might actually have to be sold in order to meet their tax bill on death.
Conversely, it will probably come as no surprise at all to learn that Her Majesty’s Revenue and Customs is always first in line and, unless a specific provision has been made, it is not usually possible to sell assets until probate has been granted, often a lengthy process in itself.
The first £325,000 (2009 / 2010) of an individual's estate is taxed at 0% and is therefore not liable to inheritance tax. For married couples and registered civil partners it is currently £650,000, where the full allowance has been passed to the surviving spouse. Anything in excess of this amount is taxed at 40%.
The following courses of action can mitigate Inheritance Tax:
- Ensure your Will is written and planned correctly to save the maximum amount of tax
- Transfer assets through the prudent use of lifetime gifts
- Create a tax-efficient fund to enable the beneficiaries of an estate to meet the tax liability without disturbing the family wealth.
No one method can, or should, be considered a "complete solution" as each person will have differing circumstances and requirements and the taxation environment can change from time to time.
Samuels Financial can offer solutions which allow your survivor access to your death benefits without them forming part of their estate. We have a service, in conjunction with four leading law firms, which is designed to provide a wide range of differing legal services covering inheritance tax, matrimonial issues and general tax planning. Please contact us if you wish to discuss your personal situation.
The information on this website is based on our interpretation of the law and HMRC practice as at April 2009. Taxation legislation and HMRC practice may be subject to unforeseen changes in the future. Wills and some areas of Inheritance Tax Planning are not regulated by the Financial Services Authority.*
*Wills writing is a separate and distinct service to those offered as a representative of St. James's Place. Wills are not regulated by the Financial Services Authority.
