Inheritance Tax (IHT) is affecting more and more of us each year.
This is largely due to the rise in residential property values. Each person has a tax free exemption for Inheritance Tax, and depending on the value of your house and other assets, this may not be that big an allowance. If you die leaving an estate worth more than the current nil rate threshold of £325,000, and you have no spouse, your estate will be liable for an IHT bill of 40% of the remainder.
Even if you do have a spouse or civil partner to inherit then this only puts off the time when tax will be payable because he or she will also pass away one day.
It could be appropriate to gift some of your estate, perhaps to children or other relatives, during your lifetime; or possibly redirect assets up to the value of the nil rate band into a trust on death.
One thing is for sure with all forms of tax; if you do nothing the government will use its considerable powers to make sure a share of your hard earned wealth ends up in their coffers. For a married couple, doing something as simple as ensuring that you each fully utilise your IHT exemption could save in excess of £100,000 in Inheritance Tax.
Fraser Wealth Management are well positioned with our professional solicitor and accountancy connections to be able to commence the process of mitigating the potential IHT liability, with the right strategy for you.