Estate and Tax Planning

Inheritance tax is a tax on the estate of someone who has died.

Inheritance Tax

Inheritance tax is a tax on the estate of someone who has died. If your estate is worth more than £325,000, Inheritance tax will be due unless you leave everything to your spouse in your will. (Spousal gifts are exempt from IHT). Inheritance tax is a tax on the estate of someone who has died. If your estate is worth more than £325,000, Inheritance tax will be due unless you leave everything to your spouse in your will. (Spousal gifts are exempt from IHT).

Spouses can transfer unused nil rate band to each other upon death. Therefore you may leave an estate of up to £650,000 without IHT being payable.

Allowances and Exemptions during your lifetime:

  • Residence Nil Rate Tax Band (introduced April 6th, 2017)
  • Your tax allowance can now be increased by a further £100,000 by passing your home onto your children (including foster children, step-children and adopted children) or grandchildren in your Will. This allowance will increase annually over the next two years.
  • Making gifts out of income- gifts in consideration of marriage £5,000 from a parent to a child, £2,500 from a grandparent to a grandchild and £1,000 to anyone else.
  • You can also give up to £250 in small gifts – per individual.
  • You can give up to £3,000 a year free of inheritance tax.
  • If you make a gift and die within 7 years from making it then Taper relief may be available.
  • If you make a gift and survive for 7 years this gift will be exempt from inheritance tax.

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