Inheritance tax

Inheritance tax (IHT), which is paid on estates after the death of the owner, is a complex issue and it is wise to consider this at the same time as you make or update your will.

More and more families, in quite modest homes, have been forced into the IHT bracket, although new measures introduced in October 2007 have eased the burden to some extent.

These rules, which apply retrospectively, mean that any unused part of the individual nil rate band – £325,000 in 2009-2010 – is automatically transferred from the first spouse or civil partner to the other on their death. In most cases the whole estate is left to the survivor, which means that they benefit from a double nil rate band.

We can advise on the tax-efficient drafting of your will and explore options to minimise your inheritance tax liability. These include trusts and ways to make the best use of gifts and exemptions allowed under the inheritance tax regime, including lifetime gifts, annual gifts, gifts to charities and agricultural and business property relief.

As part of this process, we will look at your tax planning from all angles so that, for example, a gift that saves inheritance tax does not unnecessarily create a capital gains tax liability, and on the use of life insurance policies written in trust, to remove the proceeds of the policy from future inheritance tax liability.

For more information on how we can help you, please contact us on 01702 339222 or at privateclient@btmk.co.uk