A Guide to Inheritance Tax

Safeguarding more of what is rightfully yours for future generations

When we die, we like to imagine that we can pass on our assets to our loved ones so that they can benefit from them. In order for them to benefit fully from your assets, it is important to consider the impact of Inheritance Tax.

Inheritance Tax

Inheritance Tax is payable on everything you have of value when you die. This includes your home, jewellery, savings and investments, works of art, cars, and any other properties or land, which includes any that are overseas. But there are certain circumstances if you put assets into certain types of trusts, for example, when Inheritance Tax becomes payable earlier.

Estate matters – what you need to know

When you die, your assets become known as your ‘estate’. There is normally no Inheritance Tax to be paid if the value of your estate is below the Inheritance Tax nil-rate band (NRB) threshold of £325,000, or you leave everything to your spouse or registered civil partner, or you leave everything to an exempt beneficiary such as a charity. Unmarried partners, no matter how long standing, have no automatic rights under the Inheritance Tax rules.

Where your estate is left to someone other than a spouse or registered civil partner (for example, to a non-exempt beneficiary), Inheritance Tax will be payable on the amount that exceeds the NRB threshold. The NRB threshold has been frozen at £325,000 for tax years up to and including 2020/21.

If the value of your estate is above the NRB of £325,000, then the part of your estate that is above this threshold will be liable for tax at the rate of 40%.

Contents

Estate Matters
A Guide To Inheritance Tax:
Estate Matters

The residence nil-rate band (RNRB), also known as the ‘home allowance’, was introduced in 2017 and now applies where the deceased owned… Read More »

Trusts
A Guide To Inheritance Tax:
Trusts

If you would like to make gifts to reduce a potential Inheritance Tax bill but are concerned about losing control of the money, setting… Read More »

To download the full guide please click here.

Safeguarding more of what is yours for future generations

Inheritance Tax is a complicated area, and no one likes to think about their own mortality, so it is a subject that is easy to avoid. Making sure that you’ve made plans for after you’re gone will give you peace of mind. With professional advice and appropriate planning, it can mean that you are safeguarding more of what is rightfully yours.

Everyone’s situation is different – to discuss your circumstances individually, please contact us.

LEVELS AND BASES OF, AND RELIEFS FROM, TAXATION ARE SUBJECT TO CHANGE, AND THEIR VALUE DEPENDS ON THE INDIVIDUAL CIRCUMSTANCES OF THE INVESTOR.