Inheritance tax (IHT) advice and planning.
So, if you died, Inheritance tax would be payable on everything valued above this allowance. If you make no plans in advance, this tax will be met through sale of assets before the inheritance is passed on. There are many ways that we can help you with Inheritance Tax advice and planning.
Our Tax Planning Service can help you minimise your liability to all taxes in line with HMRC rules and guidelines – not just Inheritance Tax.
Inevitably, IHT planning solutions will involve both financial and legal work. Pembroke Financial Services have long established links with many of Sussex’s top law firms and will work closely with our professional partners to formulate and implement IHT plans for you.
Will your estate be subject to inheritance tax (IHT)?
Your estate could unwittingly be subject to IHT and HMRC might become one of the largest recipients of your estate.
The late Lord Roy Jenkins called inheritance tax “a voluntary levy paid by those who distrust their heirs more than they dislike the Inland Revenue”.
There are many ways to mitigate IHT and to protect your hard-earned assets with professional independent advice.
What are the main inheritance tax allowances?
IHT is normally charged at 40% of the value of your estate, above a certain amount. This amount is known as the IHT nil-rate band, which is £325,000 for the current tax year.
Married couples can combine their IHT thresholds, meaning that up to the first £650,000 of their combined estate is IHT-free. Any unused nil-rate band can normally be passed on to the surviving spouse.
In April 2017, an additional Inheritance Tax allowance, known as the Residence Nil Rate Band (RNRB), was introduced on the family home. It is in addition to an individual’s normal inheritance tax nil rate band of £325,000.
This means an individual who owns a home (or a share of one) which is included in their estate, will have IHT-free allowances of up to £500,000.
Married couples or civil partners, can inherit any unused allowance from their spouse which could potentially pass on up to £1 million before they have to pay IHT.
How can we help?
Working in conjunction with your Solicitor or Accountant, we can provide you with inheritance tax advice and planning to ensure that your ‘estate planning’ – as it is commonly called – is both properly advised and regularly reviewed.
We can assess any potential IHT liability and discuss the financial planning options available to you.
These options may well include making large gifts outright or into a Trust and this method typically takes seven years to be effective, in addition to other actions.
Often, there is a balance to be struck between reducing an estate via spending and perhaps gifting capital and yet retaining enough capital for future needs, such as long-term care.
There are specific investments which can allow you to gift capital and yet retain the right to regular withdrawals from that capital. These Alternative and very specialist investments also seek to offer a 100% saving to IHT after two years if held at death and yet provide access and control over capital in the meantime. Whilst higher risk, these investments are proving more and more popular.
The Financial Conduct Authority does not regulate Tax or Estate Planning.
Taxation articles
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Your first meeting with our financial experts is completely free of charge.