PERSONAL SOLUTIONS

Inheritance Tax Planning

Inheritance tax has rather humorously been described as a voluntary tax, due mainly to the fact that there are many ways to mitigate it that quite a lot of people make no efforts to do.

We all work hard to build up capital and we want to make sure that our loved ones get as much of it as possible, and not the Taxman…or do we, maybe Lord Jenkins got it right when he said:

“Inheritance Tax is a voluntary levy paid by those that distrust their heirs more than they dislike the Inland Revenue”

Why do I need Advice on Inheritance Tax Planning?

You might consider taking advice on Inheritance Tax Planning to:

  • Keep your assets within your family
  • Protect your Nil Rate Band if you were to die and your partners re-marry
  • Protect assets passed to children / grandchildren from the risk of them becoming bankrupt    or divorced
  • Protect your assets from the need to fund long term care in later life
  • Reduce Inheritance Tax
  • Avoid Inheritance tax

If your estate – made up of your home, car, possessions, savings and investments – totals more than £325,000, 40% of the value over this threshold will be owed in Inheritance Tax.

So a lot of what you believe you’re leaving to your family may go to someone entirely different, and it doesn’t end there.

Until your loved ones have paid the tax bill, they won’t receive any of your estate at all. The taxman will hang on to it until the debt is settled.

As your estate increases, so does your tax liability as per the following examples.

Estate

£400,000

£500,000

£600,000

£1m

IHT Liability

£30,000

£70,000

£110,000

£270,000

We at Jigsaw Financial Associates Ltd like to think that most people want to pass on as much wealth to their heirs, and nothing to the Taxman, whilst retaining as much flexibility as they can. We understand the importance of Inheritance Tax planning in order to ensure a brighter future for those left behind when you die. With many solutions available, it is importance that you seek Financial Advice, often in conjunction with an accountant and solicitor.

*this is based on a single individual non-widowed
*Inheritance tax planning is not regulated by the Financial Conduct Authority*

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IHT rates, allowances and thresholds are subject to change in the future and IHT liabilities are subject to individual circumstances.

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