PASSING ON YOUR WEALTH
Estate Planning is much more than paying inheritance tax on the death of a loved one. Some want to provide for the next generation or leave money to a charity when they die, others want to ensure that HM Revenue & Customs won’t be the biggest single beneficiary of their estate when they die.
What is Inheritence tax ?
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IHT is a tax charged on any part of your estate that exceeds your personal allowance called the Nil Rate Band (NRB), which is currently fixed at £325,000 until April 2021.
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Inheritance tax is most commonly paid on the transfer of an individual’s estate on death but can also be due on some lifetime transfers.
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It is currently charged at a rate of 40% on the value of all worldwide assets, less any reliefs and exemptions, that exceed the NRB of £325,000 for an individual and £650,000 for a couple.
Residence Nil rate band
In April 2017 the government introduced the Residential Nil Rate Band (RNRB) it is an additional allowance for passing on the family home to direct decedents (child, step-child, adopted child or foster child) and lineal descendants.
The current allowance is £150,000 for 2019 to 2020. It will increase to £175,000 in 2020 to 2021, it will then line with Consumer Price Index (CPI).
It has some complicated rules; for larger estates the allowance is reduced, and it cannot be used against buy to let property.
We can help you:
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Review your current circumstances
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Calculate the potential IHT liability your heirs will face
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Create a plan and strategy for passing your assets on, the way you want
Possible solutions:
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Make outright gifts
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Make gifts in trust
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Insuring to mitigate any potential Inheritance Tax liability
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Keep your assets while reducing the size of your estate
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Manage Inheritance Tax without making gifts
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Business Relief
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Will or Living Trust
Importance of a Will and Power of Attorney
It is important to ensure your Will is up to date. Having a Will ensures your wishes are carried out after your death. We can review your Will and where necessary refer you to a specialist solicitor.
A power of attorney is a legal document that allows someone to make decisions for you, or act on your behalf, if you're no longer able to or if you no longer want to make your own decisions.
It is not usually one solution but a combination of options that are best suited to an individual's needs which is why when you call to discuss your need for inheritance tax planning advice we take the time to discuss your needs and fully understand your situation.