Inheritance Tax Advice & Planning

Inheritance Tax (IHT) is something many wish to plan for and reduce, but it is also important to be aware of the complications as every scenario is unique.

As a standard, each person will have a tax-free allowance on death of £325,000 which is known as a Nil Rate Band (NRB). If your estate is worth more than £325,000, then the excess will be taxed at 40% and any disposal of assets within seven years prior to death will also be liable to IHT.

With the introduction of the Residence Nil Rate Band (RNRB), you could qualify for an additional £175,000 uplift, taking your tax-free allowance to £500,000, (providing the beneficiary is a direct descendant, and you are a homeowner).

What about if you are married? There are no taxes between spouses therefore, if you have a valid will you could pass over up to £1m tax-free to your loved ones. Anything over this, again, would be liable to 40% tax, and once your estate is valued at more than £2m, you will lose the RNRB and drop back down to your standard NRB of £325,000 per person or £650,000 if married.

Here are some other ways we recommend you to help reduce the tax burden: 

• Leaving legacy wills – donating a portion of your estate to a UK charity.
• Making gifts (if you make a gift and die within 7 years of making it, there may be inheritance tax to pay. These gifts are called “potentially exempt transfers.”)
• Structuring wills to minimise inheritance tax.
• Use of trusts can help when doing inheritance tax planning in London and other cities
• Business succession planning. One of the most valuable inheritance tax reliefs is business property relief, which allows qualifying business assets to be passed to the next generation free of inheritance tax.
• Restructuring your inheritance plans following a marriage or a divorce.
• Structuring your affairs to make the most of reliefs.
•  Investments with favourable inheritance tax treatment.
•  Deeds of variation.
•  Overseas trusts.

Consult with an inheritance tax specialist to ensure that every possible advantage is utilised in your estate planning.

At Paradigm Wills and Legal Services, we genuinely care about educating people on the importance of making a lasting power of attorney in Leicester. In an industry often loaded with complex legal jargon and a conveyor-belt mentality, we provide a paradigm shift in how we offer our wills services. We aim to supply fresh ideas, clear and straightforward explanations, and a service tailored specifically to you. With you at the centre, we strive to make the will writing process as transparent as possible.