Minimising Inheritance Tax liability
Why should I plan for Inheritance Tax?
Without inheritance tax planning your family could be faced with a large tax liability when you die, considerably reducing the value of the estate passing to chosen beneficiaries.
If you die and leave an estate valued at over £325,000, your beneficiaries may be liable to pay inheritance tax at 40% of the value of your assets.
By taking advice on Inheritance Tax planning you may be able to:
- Reduce Inheritance Tax
- Keep your assets within your family
- Protect your assets from the need to fund long term care in later life
- Protect your Nil Rate Band if you were to die and your partner re-marry
- Protect assets passed to children / grandchildren from the risk of them becoming bankrupt or divorced
How can Norrie Waite & Slater help?
A number of methods of reducing Inheritance Tax liability are available, however, you will need a solicitor with specialist knowledge to help plan your estate in advance to maximise the savings on offer.
The new rules on Inheritance Tax mean that it is possible to save up to £130,000 by planning your estate in the right way, and ensuring that your future Executors have all the information they need to make these savings.
It is now possible to increase the amount which can pass free of Inheritance Tax by up to 100% if an individual inherited the entire or even part of the estate of a spouse or civil partner who died before them. For example, this saving can be made by the children of a couple on the death of the second parent. However, to claim this extra allowance they have to supply information including the value of the estate of the first parent to die and any gifts they made seven years prior to their death.
In addition, gifts which an individual made prior to their death may be added back to their estate when Inheritance Tax is calculated, meaning that Tax may still have to be paid on this amount. One exception to this, which many people are not aware of, is regular gifts which are made out of income rather than capital. For example, if a grandparent pays into a building society account for grandchildren, these gifts may not be liable for Inheritance Tax if the executors can provide information to support a claim that the gifts were made out of income and did not affect the grandparent's standard of living.
These are just some of the ways in which Inheritance Tax liability can be minimised. For more information contact us for a consultation with a solicitor.
All our Wills, Probate and Estate Planning services are offered at each of our branches. Please contact your most convenient office for advice.
Rotherham 0333 577 4215
Killamarsh 0333 577 4214
Sheffield 0333 577 0215