Having worked hard throughout our lives, saved and invested carefully, we may wish to leave something to pass on to our children, loved ones and perhaps a charity that we support.
Pam Hughes, wills and probate lawyer at Mooney Everett Solicitors in Ormskirk, Lancashire advises that there are many ways to reduce inheritance tax, but you should take legal advice to make sure that you are on the right side of the law.
“Inheritance tax will be payable on your estate when you die, but despite government promises to simplify the tax system in the UK, it remains a complex set of rules particularly in regard to inheritance tax,” says Pam.
Normally, you will not have to pay inheritance tax below a certain threshold in the value of your estate. This is the value of your property, belongings and other financial assets. Click here for latest figures.
There are also many rules which can reduce the amount of inheritance tax that you pay relating to:
- marital status;
- the way in which property is owned;
- nil-rate band;
- residence nil-rate band;
- donations to charities;
- gifts to family members;
- business reliefs; and
These are perfectly legal, however strict criteria may need to be fulfilled and therefore it is important to seek advice to ensure that your tax affairs are in order.
If you have any assets overseas, such as family property or a holiday home, you will need to plan very carefully as different rules will apply in different countries.
When planning your inheritance, you may also wish to address other issues, such as making provision for a vulnerable family member, leaving certain historic possessions to a museum, or leaving a legacy to a charity.
The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.