Inheritance Tax (IHT) Planning
With the current personal IHT exemption allowance at £275,000 (2005/2006), a great many UK homeowners who in the past might not have given a thought to Inheritance Tax will now be subject to it and the rate is a staggering 40%.
Case Study
When Clive past away a few years ago he left everything to his wife Mary. At the time their home, savings and personal possessions were valued at £400,000 and even though everything was in Clive’s name, Mary was not liable for any Inheritance Tax as transfers between spouses are exempt from Inheritance Tax.
Unfortunately Mary passed away recently and in her Will she left everything equally to her son John and daughter Susan. Mary’s estate has been valued at £550,000.
The problem now facing John and Susan is the £110,000 Inheritance Tax bill (£550,000-£275,000 = £275,000 x 40% = £110,000 IHT) which has to be paid before the estate can be released to them.
Inheritance Tax Planning is no longer the exclusive domain of “the rich”. Increases in property values over recent years now means that Inheritance Tax catches a lot of unsuspecting people and families, but much can be done to reduce and even remove this tax burden which can easily run into tens or hundreds of thousands of pounds.
If you would like to speak with one of our Advisers about personal or business protection, or to arrange an appointment, please call us on LoCall number 08456 120 375 or email us your contact details with a preferred contact time by clicking here.
We look forward to hearing from you. Please be advised that depending on your circumstances, we may introduce you to a firm of Inheritance Tax specialists to ensure that you receive the best possible advice.
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