Inheritance Tax Planning

When we die, we like to imagine that we can pass on our assets to our loved ones so that they can beneft from them. In order for them to beneft fully from your assets, it is important to consider the impact of Inheritance Tax.

How Inhertiance Tax works

Inheritance Tax is payable on everything you have of value when you die. This includes your home, jewellery, savings and investments, works of art, cars, and any other properties or land, which includes any that are overseas. 

What you need to know

When you die, your assets become known as your ‘estate’. There is normally no Inheritance Tax to be paid if the value of your estate is below the Inheritance Tax nil-rate band (NRB) threshold of £325,000, or you leave everything to your spouse or registered civil partner, or you leave everything to an exempt benefciary such as a charity. Unmarried partners, no matter how long standing, have no automatic rights under the Inheritance Tax rules. Where your estate is left to someone other than a spouse or registered civil partner (for example, to a non-exempt benefciary), Inheritance Tax will be payable on the amount that exceeds the NRB threshold. The NRB threshold has been frozen at £325,000 for tax years up to and including 2020/21. If the value of your estate is above the NRB of £325,000, then the part of your estate that is above this threshold will be liable for tax at the rate of 40%.
Small gifts not subject to Inheritance Tax liability
HM Revenue & Customs (HMRC) permits you to make a number of small gifts each year without creating an Inheritance Tax liability. Each person has their own allowance, so the amount can be doubled if each spouse or registered civil partner uses their allowances. You can also make larger gifts known as Potentially Exempt Transfers (PETs) and you could have to pay Inheritance Tax on their value if you die within seven years of making them.

Ready to sort out your Inheritance tax?​

If you're thinking about Inheritance tax solutions, we can help.

Our website offers information about investing and saving, but not personal advice. If you’re not sure which investments are right for you, please request advice, for example from our financial advisers. If you decide to invest,  remember that investments can go up and down in value, so you could get back less than you put in.

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