Why should I care about Inheritance Tax?
Updated: Jan 7
“Inheritance Tax is, broadly speaking, a voluntary levy paid by those who distrust their heirs more than they dislike the Inland Revenue” (Roy Jenkins MP)
Not many of us will consider how inheritance tax will affect us in our later years, some of us don’t think that we have an inheritance problem, and even more of us think that there isn’t much we can do about it.
In actual fact, now more than ever, an increasing number of families are leaving their children with a huge tax bill to pay instead of a modest inheritance, the exact opposite of what they intended.
You may be thinking.. “I am still young, I do not need to worry about this for a while!”.
In most cases, we can help to minimise your inheritance tax problem in 2-7 years, but depending on the size of your estate and the complexity of your situation, it could take longer. So the earlier you start planning the more likely we will be able to do something about it. Thus, you are right, you do not need to worry… as with some careful planning now you can save thousands of pounds later.
Plus, this is the last thing you want to be worrying about when you’re 95 and relaxing on a beach in Barbados drinking Malibu out of a coconut.
How do I know if I am liable?
First, you need to work out the total value of your estate. This includes your house, other property, your car, your contents and valuables etc. as well as your cash, savings and investments (If you are married or in a civil partnership, you must include calculations of your partners estate with yours, including any joint accounts).
Once you have an estimated total figure, you can subtract your ‘nil rate band’. A nil rate band is a sort of ‘tax-free’ zone of your worth (subtract £650,000 if you are married or in a civil partnership, and £325,000 if you are single).
What do you have remaining? This figure is liable for 40% tax on death. The bill, in most cases, will have to be paid before your children, or those intended, can have access to your estate. Whether it’s a small or larger amount, it’s better to minimise it if you can.
Is it possible to minimise this tax bill?
Minimising this tax bill is possible, with some careful planning and investment. Due to the complexity of inheritance tax and the importance of the issue, some of the solutions are only available to those who have sought expert advice.
This is where we come in. We have helped thousands of families and individuals in the past 20 years to minimise their inheritance tax liability, and continue to look after their finances for them. Which means that they can enjoy the rest of their lives not having to worry about the financial future of their family.
For more information, contact our team on 01727 737 610