Reduce Inheritance TAX
The inheritance tax rate is 40% of the value of the estate which is over £325,000. It will be paid by the executor using the estate’s funds. Inheritance tax will not be charged if it is stated in your Will that your property is to go to solely to your spouse or civil partner. If you die intestate there may be dispositions to other family members and tax will be charged on this.
If you have a life insurance policy this should be put into a trust. Trusts can be utilised in other ways to avoid inheritance tax. Additionally, if you make tax-exempt gifts to your intended beneficiaries at least 7 years before your death, these dispositions will not be calculated as part of your estate.
There are a number of actions that can be taken to reduce inheritance tax. They include:
- writing a will
- making gifts;
- reviewing asset ownership;
- minimising your estate;
- considering marriage;
- using trusts;
- reliefs (agricultural and business).
Speak to a member of our team
Inheritance tax planning should never be considered in isolation, so our experienced lawyers will advise on how inheritance tax, capital gains tax and income tax interact, helping you avoid unintended consequences.