Inheritance Tax (IHT) is payable on the value of your estate when you pass away. Although most people are familiar with the term, few take adequate steps to protect the wealth left to their loved ones.
In the 2017/18 tax year, HMRC collected £5.2 billion* in inheritance tax in the UK; a figure which could have been reduced had more individuals utilised inheritance tax planning and asset protection planning when preparing their estates.
How much is inheritance tax?
For the 2019/20 tax year, IHT is charged at 40% of the value of your estate above £325,000 and is dealt with by the executor or administrator of your estate.
Exceptions and Reductions
If your estate is below £325,000, there will be no IHT payable. You do not need to pay IHT when passing your estate to your surviving spouse or civil partner.
If you give your home to your children, including adopted, foster and stepchildren, you benefit from a higher threshold of £475,000.
A spouse or civil partner can also absorb any unused IHT allowance, bringing their total up to £950,000 when utilised along with other reduction and saving techniques.
Preparation
Utilising expert estate administration services, you can protect your loved ones from paying excessive inheritance tax in the UK. Having an appropriately written will, transferring assets through lifetime gifts and creating tax-efficient funds or trusts to protect your assets can ensure that your loved ones are able to benefit from the gifts you wish to leave them.
In addition to providing inheritance tax advice in London, St. James’s Place offers full estate management services across the UK, including assistance with other financial planning such as tax planning, illness or loss of income.
Why not contact us today to see how St. James’s Place could assist you in inheritance tax planning.
*Source: gov.uk-HMRC tax receipts, 24 April 2018
Advice relating to a Will involves the referral to a service that is separate and distinct to those offered by St. James's Place. Wills and Trusts are not regulated by the Financial Conduct Authority.
The value of an investment with St. James's Place will be directly linked to the performance of the funds selected and the value can therefore go down as well as up. You may get back less than the amount invested.
The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief depends on individual circumstances.
