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Inheritance Tax Planning

How We help With Inheritance Tax Planning

By understanding the reliefs that exist for spouses, charities and business and agricultural property we can ensure that your affairs are structured in the most efficient way. We will ask you about your family, your assets and your objectives so that our advice will really work for you.

If you have significant assets you are likely to need advice in relation to your Will and will also wish to consider lifetime measures. If you want to retain full enjoyment of your substantial assets until your dying day, then unless they are assets that will get full relief on your death, there is likely to be a significant payment to HMRC.

Your needs should always be the starting point, your beneficiaries inheritance comes second. We often work closely with accountants and financial planners to create a solution that works and achieves your objectives. We do not advocate complex and high risk ‘schemes’.

We are members of STEP so you can expect our advice to be the best and because we also provide expert advice to businesses, we are well placed to advise you if a substantial part of your wealth is attributable to a family business or farm.

Useful Inheritance Tax Facts

  • The current individual Nil Rate Band (2022/23) is £325 000.
  • An additional Residence Nil Rate Band of up to £175,000 may also be available depending on your circumstances. The Government have made the additional relief just about as complicated and restrictive as it can be.
  • A spouse/ civil partner can transfer their unused Nil Rate Band (and Residence Nil Rate Band) to the survivor.
  • Inheritance Tax is paid at 40% on the excess over the Nil Rate Band, unless you are leaving 10% or more of your estate to charity.
  • There are valuable Inheritance Tax Reliefs for spouses/ Civil partners, charities and certain agricultural and business property.
  • Genuine outright gifts made during your lifetime will become fully exempt from Inheritance Tax if you survive 7 years.  If you die within 7 years they will reduce the Nil Rate Band available on your death.
  • You can give away £3,000 pa, this is an annual gift exemption (it can be carried forward for 1 tax year only making a maximum annual gift exemption of £6,000 for an individual).
  • You can make an unlimited number of small gifts of £250 or less to different beneficiaries.
  • Parents can give children an exempt  gift of £5,000 upon the child’s marriage, grandparents can give £2,500.
  • Regular gifts of surplus income are exempt no matter how much they are – accurate and detailed records are required to show that the income is genuinely surplus.
  • Some gifts into certain types of trust will trigger a charge to Inheritance Tax at the lifetime rate of 20% insofar as the value transferred exceeds the Nil Rate Band.
  • You cannot give an asset away and continue to enjoy a benefit from it without falling foul of HMRC rules.
  • Expert advice really can help so do come and talk to us.