Fail to prepare; prepare to lose out
What is Inheritance tax?
Inheritance tax is typically paid by those who haven’t planned for it. IHT is a tax payable on your estate when you pass away. Your estate will consist of money, property, possessions, life insurance benefits, shares, pensions and any interest you may have in a business.
Everyone is entitled to £325,000 worth of assets to pass on free from inheritance tax. This is known as your nil-rate band. Anything over this is taxable at 40% unless at least 10% of your assets are being given to charity – inheritance tax is then charged at 36%. Married couples can pass gifts between them free of any tax regardless of value.
What is Main residence nil-rate band (RNRB)?
As of April 2017, the government are introducing a new Main Residence nil-rate band (RNRB) which will help reduce inheritance tax for some people as it will mean that some or all of the value of your main residence will be free from inheritance tax. It is in addition to the inheritance tax nil-rate band. It will begin in 2017-18 at £100,000 and will grow to £175,000 by 2020-21. The allowance is only available if the residence is being passed on to children or grandchildren however, as with the inheritance tax nil-rate band, it can be passed on to spouses.
Although it can be considered a complicated process, we are here to help and guide you through the process. We can help you to make full use of your nil-rate band and your RNRB band as of April 2017 to reduce the impact of paying IHT on your assets meaning more is left untouched for your loved ones. We will consider your unique situation and ensure that we look at all possibilities to limit your inheritance tax liabilities allowing you to feel confident and trusting of the advice that you receive.