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Inheritance Tax

40% tax when you die, make plans to reduce it...

Why not avoid the "avoidable tax?” 
The nil rate band below which inheritance tax (IHT) is not payable now stands at £300,000. Above this, assets are taxed at a hefty 40%.  (Taxation levels, bases and reliefs are subject to change.)

With house prices at their current levels, IHT is obviously not just the concern of the extremely wealthy. When you consider the family home can be worth more than the nil rate band alone, IHT is a matter many people need to think about if they want to pass on their wealth intact. 

So what can you do about it?
In practical terms there are three options; firstly do nothing and pay the tax; secondly give your assets away and hope to survive for at least seven years after; or thirdly, take advice from your independent financial adviser who can help plan a tax-reducing strategy. 

This would start with the immediate ways of reducing a potential IHT liability, encompassing using all allowances to the full, including those of your spouse, or giving certain assets to your beneficiaries now  (within the current limits). Potentially exempt transfers (PETs), for example, can allow an asset to be excluded from an IHT calculation if the owner gave it away more than seven years before his or her death.  

Of course, there is more to successful estate planning than this. If you would like advice in this area, we will undertake a detailed analysis of your circumstances, so we can recommend the best way to organise your affairs and ensure your wishes are complied with in the most tax-efficient way possible. We have the expertise required to take advantage of existing legislation and would be pleased to arrange a meeting to review your current arrangements. 

A previous chancellor once called inheritance tax the “avoidable tax”, and there are certainly many measures that can be taken to mitigate its effects.

If you would like to receive a free guide about Inheritance Tax then please call us

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