Inheritance Tax Planning in Leamington Spa

Inheritance Tax (IHT) is payable on an estate where assets exceed a certain threshold, known as the 'nil rate band'.

Large numbers of 'comfortable' people are finding that the long-term historical increase in property values means their estates may be liable for IHT when they die.

IHT is paid at a rate of 40% on assets surpassing the threshold, which has been set at £325,000 until April 2015. Furthermore, certain gifts made within seven years of an individual's death can also be included in an estate for inheritance tax purposes.

If you are looking to minimise your IHT liability, early planning is vital. Most gifts made more than seven years before death will escape tax. There are several IHT reliefs and exemptions which may be available to you if the gift is otherwise chargeable, including the 'annual exemption' of £3,000 and gifts to qualifying charities.

Individuals who leave 10% or more of their net estate to charity may be liable to pay a reduced inheritance tax 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.

Michael Harwood & Co in Leamington Spa 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
  • Lifetime gifts of assets
  • 'Generation skipping', so your estate passes directly to your grandchildren
  • Ensuring that your Will and estate plan are tax-efficient and up-to-date
  • Using trusts to manage your assets and any income generated
  • Life assurance policies
  • Valuing your business

You can reduce the liability to IHT by implementing a lifetime programme of IHT and estate planning. This will not only protect your family's wealth, but it will also help to ensure that your estate is distributed in accordance with your wishes.

The experienced team at Michael Harwood & Co can assist with a range of tax planning issues. As well as helping to calculate your IHT liability, we can deal with forms for probate, and provide effective strategies to enhance your business and personal wealth.

Contact Michael Harwood & Co today for further inheritance tax information and planning strategies in the Leamington Spa area.