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Inheritance tax planning
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IHT and Wills
Omni Lifetime Planning
We are pleased to offer a full estate planning service through our sister company Omni Lifetime Planning. We offer a nationwide service covering all the services below and more. You can find out more on the Omni Lifetime Planning Website here.
Inheritance Tax (IHT)
When a relative dies, and leaves an estate worth more than £325,000, families are required to pay 40% tax on the value of the money and property left to them over and above the £325,000 threshold. This is known as inheritance tax (IHT).
Inheritance tax is no longer something only the well-off need to worry about. Each year, several thousand more estates are dragged into the IHT net. Your estate includes all your assets, as well as property it includes savings and investments as well as life cover, bank accounts and physical property such as cars, furniture and family heirlooms. This is why your estate could be considerably over the threshold without you even being aware of it.
To protect your estate from the tax man and to ensure your money goes to the people you care about most, now is the time to start planning. We’ll help you understand the different options available to reduce your IHT liability. This could include lowering the amount of inheritance tax by reducing the taxable value of your estate by making gifts or investing in inheritance tax efficient products and services.
Trusts
An alternative to gifting is to consider using a trust which enables you to make a gift yet delay when the money is distributed. This allows you to stay in control of how and when money might be distributed.
With careful planning, you can have the access and control of the money you need to maintain your required standard of living, at the same time as providing for your loved ones and reducing the IHT liability on your estate.
Wills
New Intestacy rules came into effect at the beginning of October 2014, which change the way a person's estate is divided if they die without leaving a valid Will. These changes highlight why it’s never been more important to make a Will to ensure that you have the final say in who inherits your estate.
If you've made a Will but never updated it, you could even benefit people you no longer wish to favour. We recommend reviewing any existing Wills at least every two or three years.
We’ll work with you to understand what is important to you before working out the IHT planning methods best suited to meet your requirements. If you would like help with writing or updating your Will, we will be happy to introduce you to an experienced solicitor who specialises in preparing Wills.
Call us today to see how we can help.
Important information
Will writing, tax and trust and inheritance tax planning are not regulated by the FCA.
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Our sister company
Omni Lifetime Planning
For wills, trusts and estate planning, our sister company Omni Lifetime Planning works alongside our advisers from the same St Albans office.
Q&A
Questions & answers
How much can I leave before inheritance tax is due?
Everyone has a nil-rate band of 325,000 pounds. A further residence nil-rate band of up to 175,000 pounds applies when a home is left to children or grandchildren. Both are frozen until April 2031. Married couples and civil partners can pass unused allowances to each other, so a couple may be able to leave up to 1 million pounds.
What is the inheritance tax rate?
Inheritance tax is charged at 40 percent on the value of an estate above the available allowances. A reduced rate of 36 percent can apply if at least 10 percent of the net estate is left to charity.
Are gifts exempt from inheritance tax?
Some gifts are exempt straight away, such as gifts between spouses, 3,000 pounds a year, small gifts of up to 250 pounds per person, and regular gifts from surplus income. Other gifts are usually free of inheritance tax if you live for seven years after making them.
Do I need a will?
Yes. Without a valid will, your estate is shared under the intestacy rules, which may not reflect your wishes and can leave an unmarried partner with nothing. A will also lets you appoint guardians for children.
What is a lasting power of attorney?
A lasting power of attorney (LPA) lets you choose people you trust to make decisions for you if you lose mental capacity. There are separate LPAs for property and financial affairs, and for health and welfare.
Your first meeting is free
Talk to an independent financial adviser in St Albans. Call 01727 223251 or send us a message.