We will advise on Inheritance Tax and Capital Gains Tax and provide guidance as to how and when their effects can be mitigated. A good time to discuss these matters is when we are drawing up your Will.
Inheritance tax is only paid by five per cent of estates so it may not be a problem for you. There are a number of exemptions which can take you outside its scope. Assets left to a spouse or legal partner usually have no IHT to pay. Your house left to a close descendant attracts allowances which could also take your estate out of IHT. Even after your death your beneficiaries could agree to rearrange affairs to mitigate the possible effect of IHT. .
One of the simplest things you can do to avoid paying inheritance tax (IHT) is to spend or give your money away during your lifetime. You're allowed to spend your money how you want (obviously), so we'll assume you're on top of that. Each tax year, you're allowed to give up to £3,000 away as a gift, split between however many people you like. You're also allowed to make unlimited gifts of up to £250 to others, too. If you're off to a wedding, you can give up to £1,000 and never have to worry about inheritance tax. You can give up to £2,500 to grandchildren, and £5,000 to your children too. Wedding gifts must be made before the wedding, and the wedding must go ahead. If you make gifts above the thresholds, they may be taxable if you don't survive for seven years after making them. Otherwise they'll be tax-free too.
You can leave money to a charity Any money you leave to a charity, providing it is registered in the UK, will always be free from inheritance tax. The same goes to gifts to political parties, or to local registered sports clubs.
We can help explain it all and make sure your estate pays no, or the smallest amount of, IHT. Call us now