Inheritance tax advice

Do I need to consider inheritance tax (IHT)?

Generally, if you are married, or widowed, your executors can now use two IHT allowances on the second death within a married couple.  This means that you will not have an issue with IHT if you die with money and possessions valued under £650,000.

However, it isn’t always that simple.

You should ensure that appropriate Wills have been drawn up leaving any excess monies/assets over the Nil Rate Band (NRB – £325,000 in the tax year 2009/2010), to the surviving spouse.

You should try to estimate what your estate will be worth at the time of the second death as that is when IHT will be charged.  The value may grow faster than the NRB allowance.

In October 2006 the rules for IHT changed.  If you have existing Wills that have not been reassessed since then, then we advise that you should do so.  We can do this for you free of charge at an initial meeting with us if you should wish.

My estate is worth more than the NRB.  Can I avoid paying IHT?

We would recommend that you have a proper financial plan prepared by an independent financial adviser before embarking on any plans to avoid IHT as you need to be sure that you are financially secure for the rest of your natural life first.

Following that, any excess assets over the NRB can be given away – either directly or into trust.  Trusts are usually safer as they allow you and your beneficiaries to avoid inheritance tax after 7 years and also help you to keep control of them should one of your children become divorced or bankrupt in the future. Care home fees can also be circumnavigated if the trust is set up correctly.

How can you help me with inheritance tax?

We help people who are millionaires or small business owners with their estate planning and inheritance tax.  It forms a large part of our work and we have a great deal of experience in this area.  Many of our clients are unlikely to pay any IHT, even though they have assets of well over 1 million pounds.

Any further questions on inheritance tax?

If you want more information on inheritance tax please call us on 01763 232326 or Email us.

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