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Effective inheritance tax planning is a vital part of planning for your future. It will help make you aware of the potential charges you and your loved ones will face, how to protect certain assets, and mitigate the payment of Inheritance Tax.
Our inheritance tax planning solicitors at Warner Goodman can support you in organising your inheritance tax, ensuring that those close to you can receive the full benefit of your property, assets, and wealth.
We have extensive experience supporting clients in various circumstances, including complex estates involving businesses or multiple properties.
Our expert solicitors can offer much support in tax planning, covering areas such as:
Need help with inheritance tax planning? We have expert solicitors in Southampton, Portsmouth, Fareham, Chandler's Ford and Waterlooville.
To find out how Warner Goodman Solicitors can assist you with Wills and probate services, contact the team on 01329 222075 or email privateclientenquiry@warnergoodman.co.uk.
Our specialist lawyers at Warner Goodman can advise on the different types of inheritance tax relief that may apply to your estate.
You won't usually need to pay inheritance tax if your estate is valued below £325,000. If your estate is valued above £325,000, you can avoid paying inheritance tax by leaving the amount above the threshold to your civil partner, spouse, or a charity.
It may be possible to access additional tax relief on your estate, for example, the Residential Nil Rate Band. This may be available once the estate's owner has passed away, providing that the Will specifies the property should be passed on to their descendant(s).
We can offer expert inheritance tax planning advice, helping you to access tax relief and to draft your Will so that you can benefit from any provisions available.
You can transfer several different types of gifts to loved ones, and these gifts will not be subject to inheritance tax.
Such gifts might include lifetime gifts of up to £3,000 annually, passed on to your family members or close friends while you are still alive. You may also wish to pass on gifts to charity organisations.
You also have the option to pass on higher-value gifts, on a one-off basis, for instance, assets, shares, property, or cash. These gifts must be transferred to the recipient at least seven years before your death.
Wedding gifts somewhere between £1,000 and £5,000 are also not subject to inheritance tax. The same rules apply to small gifts to the value of £250 to numerous individuals in each tax year, typically Christmas and birthday gifts.
Our inheritance tax planning solicitors can offer advice on these lifetime gifts and educate you on other options to reduce your tax, including:
Regular and habitual gifts out of surplus income are inheritance tax-free. If you receive more net income than you need to live on, you may make arrangements to make regular gifts of any surplus at any level with immediate IHT effectiveness. You must clarify that you intend to make regular gifts this way, even if only one payment is made before an unexpected death.
This exemption is often underutilised in inheritance tax planning but can be extremely useful. Giving gifts from surplus income relies on the following criteria:
Investment in private companies can provide relief from inheritance tax after only two years of ownership through Business Property Relief. The business must be a qualifying business, and the asset must qualify as relevant business property. In these terms, a business includes a business exercising a profession or vocation.
To discuss giving gifts as part of an inheritance tax planning strategy, please contact our specialist lawyers at Warner Goodman.
Trusts can be an incredibly useful tool for tax planning. Our solicitors can support you in using a trust to transfer money to your loved ones, ensuring that tax is not applied when you pass away. There are many ways trusts can be used, including:
We can offer inheritance tax planning advice on different types of trusts, supporting you in considering your best options and ensuring you appreciate duties and responsibilities.
Our legal team at Warner Goodman has been acknowledged through the Law Society's Lexcel accreditation after a thorough audit of how the overall team works. This covers people management, file and case management, risk management, client care, strategy, and structure.
We have plenty of experience working with clients to create the perfect tax planning strategy, and we always take a practical and sensitive approach that caters to your needs.
Over the years, we've built a fantastic reputation in the legal field and wider community, all thanks to the dedication and talent of our team. Please call us to discuss your inheritance tax planning requirements today.
Inheritance tax refers to a type of tax applied to an individual's estate when they pass away. Any tax applied reduces the value transferred to the individual's beneficiaries.
Inheritance tax planning is a process used to reduce the amount of inheritance tax, for instance, by using lifetime gifts, trusts, or accessing inheritance tax relief.
There are many different ways to reduce inheritance tax. Some of the key options available include:
Another option to reduce the amount of inheritance tax is to give assets away as gifts. Such gifts are referred to as 'potentially exempt transfers.' Specific rules apply to giving lifetime gifts. For example, the gift must be given at least seven years before your death, and you must receive no benefit from the gift.
Every year, individuals can transfer gifts up to the value of £3,000, which are inheritance tax-free. Unlike potentially exempt transfers, these gifts will still be excluded from your estate, even if you pass away within seven years of the gift date.
Ensuring that you have a Will in place can support inheritance tax planning. For instance, civil partners and spouses can use a Will to transfer tax-free assets. If an individual passes away without a Will, they will likely unnecessarily incur inheritance tax on their estate.
If you choose to transfer your property to a direct descendant (grandchildren or children), applying for the Residential Nil Rate Band Allowance may be possible.
Our inheritance tax planning solicitors in Southampton and Portsmouth can offer detailed information and legal advice about all the options available.
Whether or not you will pay inheritance tax on a gift you have received depends on various factors, these include:
Yes, if you do not use a portion of your tax-free allowance on your estate, you can transfer this to the estate of your partner or spouse.
Assets left to partners or spouses are tax-free. Your tax-free allowance will not be used if you decide to leave assets to them.
Individuals can use their annual exemption to give away up to £3,000 in gifts yearly. It's worth noting that this amount is £3,000 as a total (as opposed to £3,000 per person). If you do not use up all of your annual exemption for one year, you can carry this over to the following tax year.
Gifting this way is legal, and the amounts will not incur inheritance tax when the individual passes away. It is also an option to give tax-free wedding gifts of up to £5,000 or smaller gifts below the value of £250.
Yes, a solicitor can offer a full inheritance tax planning service, supporting you in evaluating your estate and considering the best ways to access inheritance tax relief and inheritance tax reductions.
If you want to discuss UK inheritance tax planning with our expert solicitors today, please get in touch with our lawyers at Warner Goodman.
Inheritance Tax (IHT) is chargeable on the value of your estate on the date of your death at a rate of 40%. Chargeable transfers or gifts made during your lifetime are taxed at 20%, but most lifetime gifts could be exempt transfers.
Each estate is entitled to a "nil rate band" (a tax-free sum) of £325,000. You may also be entitled to claim Residence Nil Rate Band on your death.
Transfers to your surviving spouse and transfers to charities you make are usually free of IHT. Lifetime gifts to individuals who survived by seven years usually pass free of IHT. In other words, the cumulative gift clock is "re-set" after seven years. In the event of death within seven years, IHT may become payable. The nil rate band is set first against any such gifts, with the oldest being first before the remaining balance can be set against the death estate.
If you made gifts in excess of the nil rate band in the seven years before your death, the tax payable may be reduced where the gift was made more than three years before your death, otherwise known as Taper Relief. Any tax due is payable by your estate as the deceased person in this example or, in default, the recipient of your gift.
It is possible to mitigate IHT by a variety of planning means. In broad terms, the only tools available are by making the best use of exemptions authorised by legislation or using the nil rate band intelligently. By way of overview, the more elaborate tax planning schemes have been closed down by legislation over the years. The legislations contain an intricate framework of rules restricting gifts where there are reservations of benefits and the property falls within the pre-owned assets' tax framework.
The anti-avoidance framework is quite complicated, and we can help answer any detailed questions or discuss any specific ideas you may have.
Need help with inheritance tax planning? We have expert solicitors in Southampton, Portsmouth, Fareham, Chandler's Ford and Waterlooville.
To find out how Warner Goodman Solicitors can assist you with Wills and probate services, contact the team on 01329 222075 or email privateclientenquiry@warnergoodman.co.uk.
To speak to one of our experts please call us
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