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Professional Advice

Making a will after receiving professional UK inheritance tax planning advice is about the best thing you can do to ensure that after your death your assets go to where you want them to go rather than into the taxman's pocket. There is no IHT to pay on the first £275,000 you leave, but assets over this level are currently taxed at 40 per cent unless they pass to your surviving spouse. IHT is charged on the value of property and assets and on certain lifetime gifts subject to certain exemptions and reliefs. Setting up trusts during a person's lifetime or on their death under the terms of a will can be important in reducing liability to Inheritance

Asset Valuation

The first stage in tax planning is to work out exactly what you have and what you are worth in order that you can make plans to avoid inheritance tax in plenty of time. Everything must be considered including company benefits and death in service benefits. You will need to carefully consider where you want your money to go and whether or not it would be tax efficient to make gifts whilst you are still alive.

Gift Tax?

In the UK there is currently no gift tax in operation although there is a potential liability for inheritance tax when gifts are made. If you do not live for at least seven years after making a gift then inheritance tax is payable which means that it may be more sensible to give assets way to family members early to avoid tax later. There are a large number of other ways in which liability to pay tax can be reduced including the annual gift allowance and tax free marriage gifts applicable to the parents and grandparents of the bride and groom.

Marriage and Discretionary Trusts

Married couples can save a considerable amount of tax by managing their assets properly and by taking advantage of two nil rate inheritance tax bands. There is no tax payable on death when assets transfer from one spouse to another however once those assets are in the possession of the surviving spouse the opportunity to claim the deceased partner's tax exemption of £275,000 may have been lost. Far better for the deceased spouse to have left goods to the value of £275,000 to younger members of the family or to have placed that money into a Nil Rate Band Discretionary Trust for the benefit of the surviving spouse which enables the surviving spouse to take advantage of the fund and of the tax relief. A second allowance of the same amount can then be claimed when the surviving spouse dies. There are a number of other issues between married couples which should be considered in regards to tax planning especially regarding jointly owned assets including the matrimonial home and other property.

Deed of Variation After Death

An important way of reducing tax on death, especially if all of the assets have been left to the surviving spouse, is by way of a deed of variation (deed of family arrangement) which can be used to reduce an inheritance tax bill after the death of a spouse. The surviving spouse can, within two years, re-allocate assets in a more tax efficient way.

Free Legal Advice

We represent a nationwide network of solicitors who advise on tax planning matters. Our panel members also deal with probate and contested cases where either the validity of the document is called into question or there is a claim from someone who was not included as a beneficiary including relatives and dependants. If you would like advice on any of these matter either complete the contact form or call the helpline and a solicitor will discuss your needs and give initial advice at no charge and without further obligation.