As the famous saying goes “The only things certain in life are death and taxes”.
Inheritance Tax (IHT) in many ways can be seen as a voluntary tax, as with careful planning this can be substantially mitigated or avoided altogether. One thing we know is that the IHT Nil Rate Band (NRB) has been fixed until 2018.
The NRB is currently fixed at £325,000 and so for a married couple we can expect £650,000 of chargeable estate to be exempt and amounts in excess of this to be liable to 40% IHT.
It is clear from statistics released that the treasury take for IHT is on the increase and this can only escalate given that the NRB has been fixed for 5 more years and that despite the recession, many families are enjoying an increase in overall wealth and the value of their estates for IHT purposes. The fact is that the number of estates liable to IHT has increased year on year and with it the treasury take is up. The most recent figures published show this rate of increase at an alarming 25%. Most families can plan to mitigate exposure to IHT with a combination of a robust Will coupled with tax and financial planning. We now have a joined up and holistic offering with our tax team working closely with Sedulo Wealth Management.
- Do nothing and leave the chargeable estate (after NRB) liable to IHT at 40%.
- Plan to mitigate the exporuse to IHT with tax efficient funding options.
- Plan to mitage the exposure to IHT with sound tax and financial planning.
If you feel that your sole or Joint Estate may be liable to IHT, speak to either myself or Paul Lindfield and we can arrange a brief initial meeting. If you prefer, we can simply chat through your situation with a view to recommending a course of action to ensure that your legacy is not unnecessarily depleted by a contribution to the tax take.