Inheritance tax was thought to be ripe for reform in last year’s Autumn Budget but, as it happened, it was left untouched for another tax year. What that means is the £325,000 nil-rate band has been in place since 2009, while the 40% standard rate of tax that can apply on any amount above that figure goes back even further than that.
This form of death duty is levied on our estates, which consist of any property, money and possessions.
While we don’t pay it ourselves, it can take a sizable chunk out of what your beneficiaries receive, especially if you are not in control of your estate.
There are many estate planning strategies, ranging from using ISAs and trusts to writing a legally-valid will and making potentially-exempt transfers, all of which we can help you with to form a comprehensive plan.
Another one of these tactics involves using your pension to reduce the value of your estate, ensuring you leave more of your wealth to your loved ones rather than HMRC.
Failing to do this, particularly if you have an estate worth more than £500,000 including your main residence, or up to £1 million if you’re in receipt of your deceased spouse’s full unused entitlement, leaves the door open for the taxman.
The views expressed in this article are the personal views of the Author and other professionals may express different views. They may not be the views of Lambert Chapman LLP. The material in the article cannot and should not be considered as exhaustive. Professional advice should be sought in connection with any of the issues contained in the article and the implementation of any actions.