What is Inheritance Tax?
Inheritance Tax (IHT) is the tax 'your estate' pays when you die, although it can also be charged on certain lifetime gifts.
Inheritance tax is not just a concern for the seriously wealthy it is a growing worry for many people. Unlike many other taxes, there are plenty of things you can do now to make sure you pass as much of your wealth on to your family and friends, not the taxman.
These days, fairly modest estates can be liable to Inheritance Tax. Currently, only estates worth less than the £325,000 threshold will escape the Inheritance tax net. In the 2010 Budget the Chancellor announced that this threshold will be frozen until April 2014. This might seem a lot of money, but really it's little more than the cost of an average home in the Home Counties.
If your estate is above this threshold, subject to certain other exemptions and reliefs, it could bear Inheritance Tax at 40% on the excess.
How planning can help
It is possible that your estate will be liable to Inheritance tax unless you plan carefully.
Plan now and you could cut the amount of inheritance tax your estate has to pay, meaning there will be more to pass on to your family and friends.
Now, more than ever, when reviewing your Will, advice should be obtained from a proficient inheritance tax adviser to explain the present inheritance tax position. To discuss your individual circumstances please contact a member of our team.