Wills and Trusts continue to be an important means of mitigating against the risk of paying Inheritance Tax (IHT). Inheritance Tax is currently charged at the rate of 40% of all assets above a single person’s current limit of £325,000.
It is important to note that Inheritance tax is a tax on your estate, which includes everything you own. It can also be payable on gifts you have made during your lifetime. Inheritance Tax is payable on assets you own solely, and also on a share of anything you own jointly with, perhaps, your spouse.
By taking advice during your lifetime it may be possible to reduce the Tax payable, or to avoid Inheritance Tax altogether.
Things that might count towards your estate include:
- Property – your bricks & mortar, and land
- Investments including shares, bonds & gilts
- Gifts you have received from another person’s estate
- Payment from a pension plan or employee death benefit (unless the benefit of the policy has been placed in a trust)
- Other assets, “chattels” such as art, cars, jewellery and furniture.
- Gifts you have made but still benefit from, for example, a house you have given away, perhaps to your children, but which you still live in
- Certain gifts that you have made in the last seven years
- Assets held in trust from which you receive personal benefit
If you own assets jointly, your share of their value will be included in your estate.
The estate planning process involves the carrying out of a full analysis of the client’s objectives, and current assets, working out the means and measures necessary to provide for the future needs of the client and of the family members.
If you require further information about Inheritance Tax and Estate Planning services, please contact DRA Legal, DRA Conveyancing Ltd, for a no-obligation consultation in our offices, or in your own home. Fill out the message form on the contact page to provide a brief outline of your enquiry and we will contact you at the very latest within 24 hours.