Do you know what a headache you could be leaving your family when it comes to Inheritance Tax and that with careful Inheritance Tax Planning some Inheritance Tax is avoidable?
Currently Inheritance Tax (“IHT”) is charged at 40% on the balance of your assets above £325,000 (namely the 2009/2010 IHT Threshold)
Therefore, if your net estate (which is derived by adding up all your assets, i.e. your house, savings, investments, antiques, jewellery and other personal possessions and pension schemes etc and deducting from that your total liabilities, i.e. your mortgage, other loans and debts) comes to over £325,000 then your Estate will be liable for IHT when you die, with the balance above that £325,000 figure being charged to IHT at a massive 40%. Although IHT can be negated/reduced if the “spouse exemption” and/or “business property relief” and/or “agricultural property relief” were to apply in connection with your Estate.
Even if you don’t mind the taxman getting such a large slice of your Estate, there is an added problem. Depending upon what assets you have in your Estate, some or all of the IHT in respect of it has to be paid to the Inland Revenue before the Grant of Probate (which is required to deal with the administration of your Estate) can be issued. Therefore, as a deceased person’s assets are frozen upon death, there can sometimes be real difficulty in raising the required IHT.
IHT used to be a tax on the rich. Nowadays millions are caught by it. This is largely due to massive increases in house prices combined with minimal rises in the IHT allowances. So it is not really a sensible option to sit back and do nothing. Anyone who is a homeowner needs to look at his or her situation carefully and to consider doing some IHT planning.
An Avoidable Tax
The irony is that IHT is one of the most avoidable of taxes, if you spend enough time planning, for instance writing a Will, putting assets into Trust for future generations and by making use of possible lifetime gift exemptions. That is where we come in. We have several experts who can help you.
For More Information
To discuss efficient tax planning, please call Patricia Alleyne or Grazyna Scotford on 0208 864 0722 or e-mail for more information: