Inheritance Tax is paid on an estate when somebody dies, if the value of the estate exceeds the Nil Rate Band wihich ic currently £325,000* per individual. It is also sometimes payable on trusts or gifts made during someone's lifetime. If you are liable, most Inheritance Tax liabilities are payable at a rate of 40% of the value of the total estate less the current Nil Rate Band.
*the Nil Rate Band will remain at £325,000 until at least 2018.
For example, if your estate is worth £500,000, based on current legislation, £70,000 of Inheritance Tax will be due to HMRC. Without adequate planning, your estate will be liable for this amount before your assets can be distrubuted to your beneficiaries.
Inheritance Tax applies to everyone, not just the very wealthy. Due to the level of the Nil Rate Band, alongside increasing property values, more and more of our clients would generate an Inheritance Tax liability on their death, without careful planning in advance. We have a range of options at our disposal to help minimise or eradicate the tax liability your beneficiaries will have to pay.
If you would like further information on Inheritance Tax planning and ways in which we can help to reduce your potential liability, please do not hesitate to contact us.