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Inheritance Tax

small ovalVoluntary Tax

Liability for Inheritance Tax is certainly not the preserve of the rich. Rising house prices put many many ordinary people within the threshold of £300,000 (2008/9) . The total value of your estate over £300,000 will be taxed at 40% on death.

The good news is that the tax is often entirely voluntary if you arrange your affairs effectively.

small ovalKey Stages

The key stages to effective IHT planning are to:
bullet Take appropriate advice.
bullet Act sooner rather than later - this may mean making a will, gifting assets, setting up trust funds, and or taking out liability insurance.
bullet Review your position regularly.

As a rule of thumb, the earlier the planning commences, the great the chance of passing on your assets tax free to your family and not the taxman.

small ovalOur Approach

Our approach is to assist you in planning your inheritance, taking into account not only your current assets, but your future cash flow, and the wishes of yourself and your family.

An effective IHT strategy may combine not only taxation issues, but legal work and insurance. We therefore have strong links in these fields and are able to co-ordinate a strategy for you, or refer you onto the appropriate advisor for your needs.

small ovalFixed Fees

As with the majority of our services, we normally work on a fixed fee so you know how much things will cost from the outset. The first stage is to take a review of your affairs, and discuss the best strategy for you. In many cases this could be a simple as giving away some of your assets, and insuring any surplus. In other cases quite complex trust arrangements might need to be put in to play.

We can help you decide which is the best strategy for your circumstances.

small ovalCommon Errors

Finally we would say that the two most common errors in complacent estate planning are:

1. Assuming you can give away everything when you fall ill.

Large gifts you make within 2 years of death will remain fully in your estate. Gifts you make between 3 and 7 years will remain in your estate on sliding scale. (Small gifts to the value of £3,000 each tax year are exempt)

2. Signing over your main residence to your children, and remaining in the property.

Not only will this remain in your estate for up to 7 years as with other gifts, it is normally a "gift with reservation of benefit" and will usually remain in your estate for IHT purposes. If this wasn't bad enough, for capital gains tax purposes the beneficiary will become liable for any gains when the property is subsequently sold or transferred.

Please get in contact for a free consultation.


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