We have acted and continue to act for many businesses and their owners. We understand that it is imperative that your legal matters are handled in a professional and efficient manner.
Effective Inheritance Tax planning can ensure that you and your family make the best use of all available allowances and could save your estate thousands of pounds.
For most of the population, planning inheritance tax liability for your loved ones will be fairly far down the list of priorities. However, planning ahead could save your family a lot of time and money further down the line.
There are a number of allowances that can be utilised as part of a lifetime Inheritance Tax planning process. These include:
Contact us today for more information about how inheritance tax can affect your finances.
It is also important to consider your Inheritance Tax allowance and how any lifetime gifts will impact it. There is now also a need to consider your residence in light of the Residential Nil Rate Band; this can also impact your will and how that is structured.
For those considering larger gifts in excess of the Inheritance Tax allowance, you also need to consider the availability of taper relief and how this affects the overall value of the estate and the Inheritance position of your estate in the event of your death for the next generation.
At Dickinson Parker Hill, we understand that Inheritance Tax planning can seem complex and confusing to many individuals and families. That’s why we’re on hand to provide expert guidance on all the benefits of tax planning for your loved ones.
We are able to offer a range of expertise and experience to handle all of the stages of the Inheritance Tax planning process for our clients in Ormskirk, Southport, Liverpool, and around the North West. We offer a bespoke estate planning service. This will often involve making use of lifetime allowances, using trusts, and ensuring your will is as tax-effective as possible.
Here at Dickinson Parker Hill, we can enable you to take advantage of your lifetime allowances. This includes using the exemptions relating to charities; those with business assets need to consider the availability of Business Property Relief (BPR) and those with agricultural property need to consider the availability of Agricultural Property Relief (APR).
Ensuring sensible Inheritance Tax planning with clear objectives from the outset will help you put in place a strong financial foundation for your family in the event of your death. Our team is here to help you maximise the benefits of that foundation.
A trust may also be a suitable vehicle, depending on your circumstances, for estate planning in an effort to mitigate Inheritance Tax. A trust can be especially useful if you are looking to preserve family wealth, protect vulnerable beneficiaries, or maximise tax allowances. Additionally, using a whole-of-life insurance policy is a viable option for providing for some or all of any Inheritance tax bill through a payout, also known as an IHT bill.
For more information about Inheritance Tax and how our expert legal services can help you to make a real and lasting positive impact on your family’s future, please feel free to contact our team today.
Inheritance Tax planning involves preparing in advance to minimise the tax liability on your estate that will be passed on to your beneficiaries after your death. Here are some steps to go about inheritance tax planning:
In the UK, inheritance tax is a tax that is levied on the estate of a deceased person. The tax is calculated based on the total value of the estate, including property, money, possessions, and investments. If the estate’s value is below the government-set inheritance tax threshold known as the “nil-rate band allowance,” there is typically no inheritance tax to pay.
As of the current tax year, this threshold is £325,000, and an additional “residence nil-rate band” of £175,000 can be added if the main residence is left to a direct descendant. This means that an estate could be worth up to £500,000 before any inheritance tax is payable.
However, any amount above this threshold, including the value of your main residence or permanent home, will be subject to the standard Inheritance Tax rate of 40%, making it important to plan and consider the potential impact of inheritance tax on the part of your estate that may be subject to this tax for IHT purposes.
If the value of the estate exceeds this threshold, inheritance tax is charged at a rate of 40% on the amount above the threshold, known as the IHT threshold. However, there are certain exemptions and reliefs available that can reduce the amount of inheritance tax owed, such as gifts to charity or certain types of business assets. In fact, if you leave 10% or more of the ‘net value’ to charity in your will, the estate can pay Inheritance Tax at a reduced rate of 36% on some assets.
Agricultural relief is another option for those with a farm or woodland in their estate, which can allow for a reduced or even eliminated tax bill for their heirs. Business relief is also available for certain types of business assets, allowing for a reduced or eliminated tax bill for heirs as long as there is enough income left to fund the normal lifestyle of the individual. It is important to seek legal advice when considering these options to ensure all rules and regulations are followed properly. This information is subject to legislative change.
It’s important to keep in mind that inheritance tax laws and thresholds may change over time, so it’s advisable to seek advice from a professional advisor or consult official government sources for up-to-date information on how inheritance tax works in the UK.
Contact our experts today to gain a clear understanding of tax inheritance and the available exemptions and reduced bills.
