What is inheritance tax?
Inheritance tax, also known as IHT, must be paid if a person’s estate is worth more than the inheritance tax threshold when they die. The inheritance tax threshold is currently £325,000. A person’s estate can comprise of things like their property, possessions and finances, including things such as savings accounts, antiques, art and jewellery. The rate of IHT is 40% on anything above the threshold, but this can be reduced to 36% if more than 10% of the person’s estate is left to charity in their will.
IHT must be paid by the executor of the will or the administrator of the estate, using the funds gathered from the estate itself. Within the will there can be one or more people named as an executor who will have responsibility for dealing with the estate, whereas the administrator is the person who manages the estate if the person who has died did not leave a will.
With careful planning, we can help you to ensure that maximum use is made of your IHT allowance which is available after you die. Call Stephensons and speak to one of our London probate experts about an inheritance tax efficient will. Our specialisms include:
- London inheritance tax through Wills
- London inheritance tax planning through lifetime gifting
- The creation and management of trusts to pass on your estate
You can use our online inheritance tax calculator to find out how your estate will be affected.
Why do I need help with inheritance tax planning?
Inheritance tax can be quite a complex process involving laws and details which many people are unaware of. For example:
- If you are married and passing on your assets to a surviving spouse or civil partner, they will be exempt from paying inheritance tax. However, you could be wasting your personal inheritance tax allowance.
- You can give away your assets during your lifetime to avoid inheritance tax, but must outlive the gift by seven years for it to be viable.
- Inheritance tax must be paid six months after the end of the month of death, otherwise you will begin to incur interest.
- Not everything you own will be liable to inheritance tax – it will depend on the type of asset and you may be able to receive a reduction.
Get in touch
If you are based in London and would like to talk to a probate expert at Stephensons about planning your inheritance tax, get in touch today. We will be happy to provide you with guidance and details in regards to your specific estate. You can call us on 0203 837 3658 or fill out our online enquiry form and someone will be in touch very soon.