By taking no action you could, inadvertently, end up making HMRC your biggest beneficiary.
Proper planning can help you pass on as much as possible to the people you choose by avoiding additional unnecessary tax charges.
It's the tax paid on the value of assets passed on by a person when they die or as a gift when alive.
The first £325K of a deceased’s estate is charged at 0%. This is known as the nil rate band and is the amount that can generally be passed on without being an inheritance tax bill. Anything above this could be taxed at 40%.
No inheritance tax is payable where you leave or gift anything to your (UK-domiciled) spouse or registered civil partner.
This is an additional inheritance tax-free allowance for ‘qualifying’ home owners with estates worth less than £2.35million that can result in you being able to pass on up to £500,000 when you die before inheritance tax has to be paid.
A will sets out who you would like to inherit, how much you would like them to get and whether it’s delayed or straightaway. It can also contain instruction that can reduce inheritance tax, for example by leaving money to charities. Visit our Wills page to find out more.
If your estate is worth more than your available nil band rate, you will usually have to pay inheritance tax. However, there are some steps you can take to ensure you don’t pay more than you have to:
When it comes to reducing any potential inheritance tax bill, the steps you can take can range from the relatively simple to the very complex.
If you have any inheritance tax concerns, our Financial Planners and specialist advisers would be happy to help.