Inheritance Tax Planning in Bath

Inheritance Tax Planning in Bath R D Owen and Co

Inheritance Tax, or IHT as it is commonly known, is due on an estate where the assets exceed a certain threshold, known as the 'nil rate band'.

Despite ongoing uncertainty in the housing market, many people need to appreciate that the value of their home may take their estate into the IHT chargeable bracket.

The full rate of IHT is 40% on the estate value in excess of the threshold, which has been frozen at £325,000 until April 2015. Taxable gifts made up to seven years before death are added back into your estate and tax is calculated on the inclusive value.

Early planning can play a key part in minimising the IHT liability. Most gifts made more than seven years before death will escape tax. A number of IHT exemptions and reliefs may apply to gifts made within the seven years before death, including gifts made to a qualifying charity and an 'annual exemption' of £3,000.

Following recent changes to the legislation, those who leave 10% or more of their net estate to charity may be eligible to pay a reduced IHT rate of 36%.

Transfers of assets between spouses and civil partners are not chargeable to IHT. This may mean the nil rate band available on the first death has not been fully utilised. In a large number of cases the unused proportion of a deceased partner's nil-rate band can be added to the total nil-rate band available on the second death. The appropriate forms and supporting documentation should be sent to HMRC by the executor or personal representative dealing with the estate.

R D Owen and Co in Bath can advise on a range of IHT planning strategies, which may include:

  • Making the most of reliefs, including business property and agricultural property relief
  • Making the best use of exemptions
  • Ensuring that your Will and estate plan are tax-efficient and up-to-date
  • 'Generation skipping', so your estate passes directly to your grandchildren
  • Valuing your business
  • Using trusts to manage your assets and any income generated
  • Life assurance policies
  • Lifetime gifts of assets

Through careful planning, it may be possible to reduce the inheritance tax due on your estate and thus safeguard your family's wealth. In addition, a well-drafted Will can help to ensure that the wealth you have built up during your lifetime benefits the right people on your death - and it can also be structured to save tax.

R D Owen and Co can assist with all aspects of tax planning, from helping to calculate your IHT liability, to dealing with forms for probate, and providing proactive strategies to increase your business and your personal wealth.

Contact R D Owen and Co today for further inheritance tax information and planning strategies in the Bath area.