Inheritance Tax Advice

Inheritance tax (IHT) is a tax on the estate (property, money, and possessions) of someone who has died. It is important to understand the basics of UK inheritance tax, whether you are an executor of an estate or an individual planning for the future.


In the UK, IHT is payable on the value of an estate above the nil-rate band, which is currently set at £325,000. Any amount above this threshold is taxed at 40%. This means that if the value of the estate is below the nil-rate band, no IHT will be payable.


There are some exemptions and reliefs that may be available to reduce the amount of IHT payable, such as:


Spouse or Civil Partner Exemption: If the deceased was married or in a civil partnership, the surviving spouse or civil partner is exempt from IHT on the inherited assets.


Annual Exemption: Everyone is allowed to give away up to £3,000 in each tax year without it being liable for IHT. Additionally, it is possible to carry forward any unused allowance from the previous tax year.


Gifts to Charity: Any gifts to registered charities and political parties are exempt from IHT.


Business Property Relief: Business assets or interests may qualify for relief from IHT, with the percentage of relief depending on the length of ownership and the type of business.


It is important to plan ahead to ensure that the value of your estate is distributed according to your wishes and with the minimum amount of IHT payable. This may involve creating a will, making lifetime gifts, and considering tax-efficient investment options.


If you are the executor of an estate, it is important to seek professional advice to ensure that you are fulfilling your legal duties and managing the estate in the most tax-efficient way possible.


At our inheritance tax planning service, we can help you understand the basics of UK inheritance tax and provide tailored advice to help you minimize the amount of IHT payable on your estate. Contact us today to learn more about our services and how we can help you plan for the future.