Inheritance and tax planning

Inheritance Tax Threshold

• The current inheritance tax threshold in 2014/15 is £325 000.
• If your estate is valued below this then inheritance tax does not have to be paid.
• If over the threshold, the tax is payable at 40% on the amount over the threshold, or 36% if the estate qualifies for a reduced rate due to a charitable donation.

Married Couples and Civil Partners Increased Threshold

• Now when the second partner dies, the inheritance tax threshold can rise £650 000.
• This is because the first spouse’s unused Inheritance Tax transfers to the second spouse.

Tax planning allows you to think about your home, the value of investments, trusts and gifts. Early planning with us can save substantial amounts of money in the long term.

We will advise you on reducing Inheritance Tax by explaining:

• Reliefs and Exemptions - Spouse or civil partner exemption, charity exemption, annual exemption, small gift exemption, wedding gifts
• Lifetime Planning - You can make a number of gifts of different sizes throughout your lifetime to reduce the value of your estate for inheritance tax purposes, but this has to be made correctly or can fall back into your estate.
• Deed of Variation or Disclaimer of Inheritance - The transfer of inheritance directly to other family, friends or charities if you receive an inheritance, have no need for it and are worried about the effect it will have on your inheritance tax.
• Spousal Bypass Trust - Trust that can be set up to receive funds such as death in service benefits. This is held for named beneficiaries outside of your estate.