What is inheritance tax?
Inheritance tax is the tax due on your estate upon the time of your death (or in certain circumstances by the making significant transfers during your lifetime). In most cases this tax will need to be paid within 6 months of the date of death, to prevent interest from being charged on the amount owed.
Inheritance Tax Threshold
Inheritance tax is only due to be paid if your estate is valued higher than £325,000 (2010/15). This is known as the “Nil Rate Tax Band”.
Anything above the basic Nil Rate Tax Band of £325,000 is potentially liable to be taxed at 40%.
Who pays inheritance tax?
The named personal representative also known as executor pays any inheritance tax due on the estate.
The executor is named within your Will, therefore, dying without a Will can lead to complications arising when appointing someone to handle your affairs.
When would I not have to pay inheritance tax?
You will not need to pay inheritance tax if your estate (property, savings, investments) are valued below £325,000 or gifts in excess of the nil rate bands are paid to exempt beneficiaries such as your spouse or Charities..
Can I avoid inheritance tax?
It is not possible to avoid inheritance tax directly but with expert careful planning it is possible to reduce the inheritance tax eventually due.
How can we help?
Our experience and knowledge in estate planning and inheritance tax, spans over 25 years and as such we are able to offer you specialist legal advice to ensure you do not pay more than you have to.
In particular,a carefully drafted will and use of specific trusts can be used to achieve this.
Contact us on 01202 802807 to arrange a free initial consultation at our Bournemouth or Christchurch office where we can answer any questions you may have.