Estate & IHT Planning

Estate Planning and Inheritance Tax Planning

Inheritance Tax (IHT) is a widely misunderstood tax and a tax that you can volunteer to pay — or not

FICTION: There’s a notion abroad that to escape IHT you must be prepared to sacrifice your financial security by kissing goodbye to your capital and giving it to your family while you’re still alive. That’s simply not true.

FACT: By using the right strategies you can still retain access and control of your capital and shield it from any potential IHT liabilities.

What is true about IHT…

  • If the value of your estate is more than £325,000 (£650,000 for married couples and civil partners) any amount above that figure will be subject to a maximum IHT tax charge of 40%
  • The value of your estate is the sum total of everything you own — less any allowable debts or other liabilities
  • Inheritance Tax has to be paid no later than six months after the end of the month of death
  • Ensure that pensions and life insurance polices are written in trust otherwise they will included in your estate
  • Make a will, otherwise your estate will be shared out in a strict order of priority according to the ‘rules of intestacy’
  • You have to be alive to make acceptable arrangements to avoid paying IHT
  • There’s nothing to stop you spending your wealth — every last penny if you want — or disposing of other assets so as to reduce the taxable value of your estate

Not all estate planning and wills are regulated by the Financial Conduct Authority.

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