Despite the recent fluctuations in the property market, previous rises in house prices could mean more people are finding themselves potentially liable to inheritance tax. Are you one of them?
If the things you’ve worked hard for are worth more than £325,000* and you haven’t put any plans in place, you could find that HM Revenue & Customs (HMRC) receive a large amount of your estate when you die – assets that you’d probably prefer to leave to the people you care about.
This is where your adviser can help. There are many ways to reduce your inheritance tax liability and with some careful planning, you may not even have to pay it at all. You should be aware the tax position may change in the future.
Remember, your estate is made up of everything you own.
Four steps to reduce your inheritance tax liability
Make a will
If you die without leaving a will, some of the people who you want to benefit from your estate may be unable to. It’s therefore always better to leave clear, legally enforceable instructions on what you want to happen.
Do the basics
There are allowances, exceptions and arrangements that can help reduce your inheritance tax liability.
Reduce your estate while you’re alive
Another way you could reduce your inheritance tax bill is to reduce the value of your estate. You can do this through gifts, of which there are various types.
Make provision to pay the tax when you die
Sometimes it’s not possible to completely remove your inheritance tax liability. If you’re in this situation, you may want to talk to your adviser about the solutions available to you such as taking out life assurance written in trust to cover any potential inheritance tax bill you have.
*Individual Inheritance Tax threshold for 2014/2015, frozen until April 2018. For couples/civil partners this is £650,000.
This article is for general use only and is not intended to address your particular requirements. It should not be relied upon in its entirety and shall not be deemed to be or constitute advice.
GreenSky Wealth Ltd is an appointed representative of Financial Limited which is authorised and regulated by the Financial Conduct Authority. FCA No: 516410
Will writing and some aspects of Inheritance Tax Planning are not regulated by the Financial Conduct Authority.