Recently published statistics show that HMRC have collected a record £5.1bn from Inheritance Tax (IHT) in the year ended May 2017 and the number of families paying IHT has increased by 160% between 2010 and 2016.
The first step in planning for Inheritance tax is to make a Will.
According to the Law Society, roughly one in three people die without a Will in place.
Establishing a Will is a vital part of any estate planning exercise, not only to make certain that matters are dealt with in a tax efficient way, but also to ensure that your wishes are carried out.
Having a Will reduces some of the stress on your family and friends at a very difficult time. It can also assist in avoiding family disputes, reduce the costs in administering your estate, save Inheritance Tax (“IHT”) and protect assets.
It is vital to review your Will regularly to update for changes in circumstances and to ensure that your Will is drafted in the most tax efficient way.
There are rigid rules as to who inherits your assets when you die without a Will, the rules of Intestacy. Who gets what depends on the value of the Estate and who the surviving family members
are if any.
This is out of your control!
Often very simply steps taken in advance can avoid IHT liabilities arising on death which will result in more value being passed to your loved ones.
The following are some of the main exemptions and reliefs which should be considered as part of IHT planning and making a Will:
Making use of the IHT Annual Exemption – £3,000 per annum per individual;
Small gifts of up to £250 per annum per recipient;
Gifts in consideration of marriage. The exempt amount depends on the relationship
between the donor and party getting married;
Gifts to charities, political parties, gifts for national purposes etc. are exempt;
Normal expenditure out of income;
Potentially exempt transfers;
Business property relief; and
Agricultural property relief.
Making a Will and IHT planning can be complex areas, and professional advice should always be sought before any action is undertaken.
Speak To A Cross Border Tax Expert
For expert advice in the area of cross border tax, please complete the form below or contact a member of our professional team email@example.com or telephone our Dundalk or Newry offices on the numbers below.
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