[IHT] or inheritance tax as it is more usually known, is levied on any transfer of assets to other people or to a trust. This tax is usually paid in respect of an individual’s estate when they die – but it is often seen as a voluntary tax as with careful tax planning advice, it can be possible to cut down or even remove liability for IHT entirely.
When you pass on, the size of your estate which is liable to tax is calculated as the total value of all your assets and possessions – which include not only your cash, investments and property, but also any proceeds of life insurance policies and business interests – less any available tax reliefs or exemptions. If the taxable estate exceeds what is known as the “nil rate band” which is currently set at £325,000, then the remainder of your estate is liable for tax at the rate of 40%.
In the event there is any unused “nil rate band”, this may be transferred between spouses or civil partners after the surviving spouse or partner dies– which has the effect of potentially doubling the nil rate band applicable for the survivor – at current rates to £650,000.
Inheritance tax is a particularly complex area, especially for those people whose estates are likely to exceed the nil rate band – however there are many steps that can be taken to minimise liability for inheritance tax – especially if the estate contains agricultural or business interests.
Don’t risk leaving a big chunk of your estate to the taxman – make sure you have current up-to-date will and that you take proper advice from your solicitors and accountants on tax planning issues. Don’t delay. Give our specialist wills and probate solicitors a ring today on Salisbury [01722 422300] or Andover  364433.