will your estate pay inheritance tax?
there is a basic allowance of £325,000 which can pass tax free on your death. This is known as the "nil rate band" as it is the amount the government charge a nil-rate of tax on. Anything over this amount is taxed at 40% (or the slightly lower 36% if you leave at least 10% of your assets to charity).
if you are married or in a registered civil partnership and leave everything to each other on the first death, these assets pass free of tax provided you are domiciled in the UK. This means that you would not have used your nil rate band allowance, so on the second death, the estate could claim both totalling £650,000.
there is a further allowance bringing the total for a couple to £1 million although this additional allowance is linked to your property and is not available to everyone. Your estate could be eligible to claim this depending on its size and the terms of your Will. It is therefore extremely important that you are not losing out on this additional Inheritance Tax allowance if your Will is incorrectly drafted.
how can we help?
we can conduct a review of your assets to ensure you are making the most of the tax planning avenues available and also annual gifts and exemptions to reduce your estate in the most tax efficient way possible. Where lifetime gifts are not suitable, we can combine an estate review with the preparation of new Wills to ensure that as much of your estate is preserved for your loved ones as possible on your death, rather than losing out to unnecessary tax bills.