Inheritance Tax (IHT) is payable on your estate at the time of your death. If you are single the IHT threshold is £325,000 and if you are married, in a civil partnership or widowed, the threshold increases to £650,000 (this figure may change).
Your ‘estate’ includes everything you own at the time of your death, including property, savings and investments. The rate of IHT is currently 40% of the amount over the threshold.
Calculating IHT is complex, but there are several ways that you can plan ahead so that your wealth is protected and the IHT bill that your beneficiaries have to pay is lower. In order to make sure you are planning efficiently for the future, it’s best to talk to an independent financial adviser.
A specialist IHT adviser will have up-to-date knowledge of the various ways you can reduce your IHT bill, allowing you to leave more for your family. By listening to you, and finding out more about your current financial position, they can suggest how best to plan and organise your finances to make the best use of the options available to you.
Understanding the outcomes you want – whether it’s to do with leaving your property for others to live in, protecting an investment within a trust for grandchildren or simply ensuring that your beneficiaries are aware of what your assets are and how they are documented – allows your adviser to recommend pathways to you. You decide what is best for you and your family, and they will help you to put it in place.
A good adviser will also regularly review where you are, and let you know when IHT thresholds or arrangements change, so that your plans are always up-to-date and working hard for you and those you love.
IHT advice is available for individuals, business owners and trustees.