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As the old joke goes, the only two certainties in life are death and taxes. Inheritance tax is the tax taken out of a deceased person’s estate before the remainder is passed on to their heirs. The way IHT currently works is that transfers between spouses/civil partners are excluded from the calculation of the value of the estate for IHT. They are also made free of tax.
For assets not left to a spouse/civil partner, there is a default threshold under which tax is not charged. This is currently £325K. Above this, tax is charged at a flat rate, currently 40%.Â
There are however some exceptions to this, one of which could be extremely important.
If you own a residential property your tax-free allowance is increased to £500K provided that:
you leave it to your children (including adopted, foster or stepchildren) or grandchildren
and
your estate is worth less than £2 million
There are some other exemptions (for example donations to charity are excluded from the taxable value of your estate) and possible exemptions (for example qualifying gifts are also excluded). How useful these will be will, of course, depend on a person’s individual situation.
HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.
Contact us for help and advice
[/et_pb_text][et_pb_image _builder_version=”4.4.9″ alt=”inheritance tax” title_text=”Last Will and Testament concept image complete with spectacles and pen.” src=”https://appletreefinance.com/wp-content/uploads/2020/07/Depositphotos_23557569_s-2019.jpg” hover_enabled=”0″][/et_pb_image][/et_pb_column][et_pb_column type=”1_3″ _builder_version=”3.25″ custom_padding=”|||” custom_padding__hover=”|||”][et_pb_accordion admin_label=”Accordion” _builder_version=”4.4.9″ hover_enabled=”0″ use_border_color=”off” border_color=”#ffffff” border_style=”solid”][et_pb_accordion_item title=”Pensions” _builder_version=”3.0.47″ open=”off”]It’s important to plan ahead for your retirement. Here, we explain why pension planning is so important, and describe some of the options available to you. This information is intended only as guidance. For advice on your specific circumstances, please get in touch.
Read More[/et_pb_accordion_item][et_pb_accordion_item title=”Investment” _builder_version=”3.0.47″ open=”on”]Investing money needs careful consideration and you need to be absolutely sure of the risks involved. This section provides generic information on different types of saving & investment. You should seek advice appropriate to your specific circumstances prior to making any decisions.
Read More [/et_pb_accordion_item][et_pb_accordion_item title=”Mortgages” _builder_version=”3.0.47″ open=”off”]A mortgage is likely to be the single largest financial commitment you ever make. There’s a wide range of mortgage products out there, with varying interest rates and repayment options available.
Read More[/et_pb_accordion_item][et_pb_accordion_item title=”Insurance” _builder_version=”3.0.47″ open=”off”]It’s important to ensure you put the right insurance in place to protect your home, it’s contents and your overall financial security.
Read More[/et_pb_accordion_item][et_pb_accordion_item title=”Protection” _builder_version=”3.0.47″ open=”off”]Life and Protection Insurance policies can protect you and your family from the financial consequences of death, a serious accident or illness, or unemployment.
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