Inheritance Tax
Inheritance Tax planning is an essential consideration for individuals and families wanting to protect their wealth for future generations. With a thorough understanding of rules, reliefs, and exemptions, we help clients reduce their potential tax liability and ensure their estate is distributed according to their wishes. With over 125 years of experience in tax services, our firm is committed to providing trusted, comprehensive Inheritance Tax planning and support.
What is Inheritance Tax?
Inheritance Tax (IHT) is a tax on the estate (including property, money, and possessions) of someone who has passed away. The standard rate is 40%, charged on the value of the estate above the tax-free threshold, which is currently £325,000.
Certain exemptions and reliefs can reduce the IHT burden:
- Nil-rate band: The first £325,000 of an estate is tax-free.
- Residence nil-rate band: An additional allowance when passing on a main residence to direct descendants.
- Spouse or civil partner transfers: Assets transferred to a spouse or civil partner are generally exempt from IHT.
- Charitable donations: Gifts to registered charities may be exempt, and estates leaving 10% or more to charity may qualify for a reduced rate of 36%.
With expert planning, it’s possible to maximise these allowances and reduce the Inheritance Tax liability for your estate.
Our Inheritance Tax services include:
We provide strategic advice on how to structure your estate efficiently, making use of all available exemptions and allowances. Our estate planning services include tailored solutions to reduce the taxable value of your estate, helping you safeguard more of your wealth for your beneficiaries.
Gifts given during your lifetime may qualify for Inheritance Tax exemptions or reductions. We advise on the best ways to make tax-efficient gifts, utilising allowances like the annual gift exemption, marriage gifts, and more, while helping you balance present and future needs.
For business owners and those with agricultural property, we help navigate complex reliefs that can reduce or eliminate Inheritance Tax on these assets. By structuring your business or farm correctly, we ensure maximum relief is achieved.
Trusts can be a valuable tool in Inheritance Tax planning, helping you manage and protect assets for future generations. We provide advice on setting up and managing trusts, ensuring they align with your wishes and offer tax advantages.
Who Needs to Consider Inheritance Tax?
While not everyone’s estate is subject to IHT, it’s important for those with substantial assets, such as property, investments, or business interests, to consider IHT planning. Even if your estate currently falls below the IHT threshold, rising property values or asset growth can push it over the limit in future years.
People who may benefit from IHT planning include:
- Homeowners, especially those with valuable properties
- Business owners wanting to pass on business assets efficiently
- Individuals with large investment portfolios or savings
- Anyone aiming to provide for children, grandchildren, or other beneficiaries
Early IHT planning can protect your estate, ensuring your assets go to your loved ones rather than being diminished by tax.
