Inheritance Planning Solicitors & Inheritance Tax Planning
When you have worked hard all your life, saving carefully and paying taxes, it seems particularly unfair that your loved ones may have to pay thousands of pounds in inheritance tax.
There are various reliefs and exemptions that can help to significantly reduce the tax bill however and at Clifford Johnston & Co. we have the expertise and in-depth knowledge required to ensure that you don’t pay more than is necessary.
For help with inheritance planning and to safeguard your legacy contact us today to arrange an appointment with one of our expert Wills and Probate Solicitors in Manchester or Stockport.
Making a will can help to secure the financial futures of your loved ones but many families are losing out on hundreds of thousands of pounds due to a failure to plan ahead.
Without a will your estate may not be passed on according to your wishes and can mean that a large amount of tax will have to be paid that could otherwise have been avoided.
Forward planning often seems unnecessary, uncomfortable or complicated but it is the only way to protect your assets and guarantee that they are distributed as you would want. With the right legal advice it can be a quick, simple and positive process that will give you peace of mind that your family’s future is secure.
At Clifford Johnston & Co. we provide a bespoke service based on your individual situation and circumstances, helping you to benefit from all the available tax reliefs and exemptions.
What is inheritance tax?
Inheritance tax is deducted by the Government from the money, property and possessions of someone after their death. The total value of your estate will include the following assets:
- Life insurance policies
- Art and antiques
Inheritance tax does not have to be paid on assets totalling £325,000 or less. An estate worth more than this will be liable to pay 40% tax on anything above the £325,000 threshold or at a reduced rate of 36% if at least 10% of the estate is left to charity.
If your main residence is left to your children, step-children or grandchildren it is exempt from this calculation and could increase your inheritance tax threshold by an additional £125,000. Married couples or those in civil partnerships can therefore currently leave an estate up to the combined value of £900,000 tax-free, with the figure set to rise to £1million by 2021.
Inheritance tax relief and exemptions
Certain estates are exempt from inheritance tax, for example:
- When everything above the £325,000 threshold is left to a spouse, civil partner, charity or a community amateur sports club.
- Where a person has died in active service including armed forces personnel, police, firefighters, paramedics and humanitarian aid workers.
- If a person who was injured in active service has died prematurely as a result of that injury.
There are many other reliefs and exemptions however so it quite literally pays to know what you may be eligible for...
Gifting money or assets to family or friends while you are alive can be a good way of reducing the value of your estate and subsequently the amount of inheritance tax payable. Gifts of £3,000 can be made each tax year without attracting inheritance tax. Larger gifts will also be exempt as long as you live for at least another seven years.
If you have a defined contribution pension scheme built up through your own contributions along with those of your employer this can be one of the most tax-efficient ways of passing on wealth. If you pass away before the age of 75, the pension is exempt from inheritance tax and after the age of 75, the beneficiary will still only need to pay tax on the money at their own marginal income tax rate.
As long as they were owned for at least two years previously, it is possible to claim either 50% or even 100% tax relief on certain business assets, which have been passed on either while the owner was alive or as part of the will.
Contact our Inheritance Panning team
The rules surrounding inheritance tax can be complicated and confusing so to avoid the potential pitfalls call today and speak with one of our team for friendly, professional and affordable advice.