inheritance tax planning
Inheritance tax (IHT) is payable on death on the amount of an individual's estate over the nil rate band. There are a number of reliefs and exemptions, and inheritance tax can also arise on certain gifts or transfers of assets made during your lifetime.
There are however many steps that can be taken to reduce your IHT liability – and you do not need to be a millionaire in order to benefit! You should ensure your affairs are arranged in the most tax-efficient manner possible and decide on the right distribution of assets for your family circumstances. Then you can look at how best to achieve that distribution with the minimum tax cost. Our team of personal tax specialists will be delighted to help you with any elements of IHT planning.
Whatever the size of your estate you should write a will to organise your financial affairs and other matters following your death. This will be even more important if you have an unusual or complex family, perhaps as a result of divorce and remarriage or if you have dependants who are not blood relatives. Stepchildren, for example, will not inherit unless there is a will. A will is essential in the case of partners who are not legally married, as they have no rights to property in the eyes of the law unless the property is jointly owned.
It is a common misconception that if a married person dies without a will then everything automatically passes to the surviving spouse. This can happen if there are no other surviving relatives (or if everything was owned jointly) but this is not usually the case.
If you have a valid will you are testate. If you do not have a valid will you are intestate. If you die intestate your estate will be dealt with under the intestacy rules. In England & Wales these are found in the Administration of Estates Act 1925 section 46. (Different provisions apply in Scotland.)
Writing a will is not an isolated action. Once written it should be reviewed regularly to ensure it keeps pace with your family circumstances and financial position.
We recommend that you take professional advice to ensure that the document is correctly drafted and accurately reflects your wishes. We will be delighted to introduce you an appropriate solicitor. You may also wish to use your will to achieve some inheritance tax planning which we would be happy to help you with.