Inheritance Tax Planning
When you die, the Government requires that your executors assess how much your estate is worth and if there is no valid will they then determine who gets your possessions, including the cash you have in the bank or in investments, property and any businesses you own.
The Inheritance Tax threshold, set by the Chancellor, is the amount everyone is permitted to leave without their beneficiaries needing to pay tax on it.
This is called the Nil-rate Band. Anything over the threshold is subject to a 40% tax. Currently (2012/13), the threshold is £325,000.
Married couples are able to combine their allowances, making the first £650,000 of their estate tax-free. It should be noted that dual allowance does not apply for un-married couples. Even if your assets fall below this figure it could be that life assurance policies or death-in service payments may create a liability for inheritance tax.
Inheritance Tax is a financial fact, so it makes sense to know how it will affect you. The Financial Detectives can help you to plan ahead, ensuring your Estate is Inheritance Tax efficient.