Inheritance Tax can be complex and the rules do change regularly, so the best way to ensure that you mitigate the amount of tax payable on your estate, is to seek advice as part of your estate planning process.
Currently Inheritance Tax is payable on death at the rate of 40% on the value of your net assets over £325,000.The first £325,000 is called the Nil Rate Band because although it is taxable to Inheritance Tax, it is taxed at 0%.
If someone is in a marriage or civil partnership, they can leave everything free of IHT to their partner, and when the second partner dies, the two allowances can be added together and the combined value up to £625,000 will not be taxable. This is known as the Transferable Nil Rate Band. If you are married, the best way to pay less Inheritance Tax (or even none at all) is by making IHT efficient Wills and we can help you do this.
There is also an extra £175,000 allowance when the main home passes to a direct descendant, known as the Residence Nil Rate Bands. Whilst going through the estate planning process we will talk you through all of the Bands and also discuss any relevant IHT exemptions with you, including, Spousal Exemption, Charity Exemption, Business Property Relief and Agricultural Relief.