Inheritance tax will be payable on your death if your estate is worth more than the “nil rate band” – currently £325,000. If your estate is worth more than this, your heirs will pay 40% tax on everything above this amount.
Legislation was introduced in the 2008 budget to make changes to the way the nil-rate band is applied to married couples and civil partners, giving an effective nil rate band of £650,000 for the remaining spouse or partner after the death of one partner. This legislation came into effect in April 2008 and applies retrospectively (ie where one partner is already deceased).
There are a number of measures you can take to minimise the effect of inheritance tax. With our help, you should look at the following areas:
- Is your property jointly owned – if so has the ownership been set up to ensure both you and your spouse/co-owner can use your nil rate band effectively?
- Are you making the most of all family members’ tax free allowances when bringing income into the household?
- Can you use trusts to ringfence assets so they are not taken into account when inheritance tax is due?
- Would an insurance based policy or trust that pays out on your death to cover inheritance tax work for you?
Contact us to arrange a free initial consultation to discuss how we can help minimise your potential inheritance tax liability.