Inheritance Tax Planning in Horsham
Inheritance Tax, or IHT as it is commonly known, is due on an estate where the assets exceed a certain threshold, known as the 'nil rate band'.
While the property market is still plagued with uncertainty, many people need to realise that the value of their home may push their estate over the inheritance tax threshold.
The full rate of IHT is 40% on the estate value in excess of the threshold, which has been frozen at £325,000 until April 2015. Taxable gifts made up to seven years before death are added back into your estate and tax is calculated on the inclusive value.
If you are looking to minimise your IHT liability, early planning is vital. Most gifts made more than seven years before death will escape tax. There are several IHT reliefs and exemptions which may be available to you if the gift is otherwise chargeable, including the 'annual exemption' of £3,000 and gifts to qualifying charities.
Individuals who leave 10% or more of their net estate to charity may be liable to pay a reduced inheritance tax rate of 36%.
Transfers of assets between spouses and civil partners are not chargeable to IHT. This may mean the nil rate band available on the first death has not been fully utilised. In a large number of cases the unused proportion of a deceased partner's nil-rate band can be added to the total nil-rate band available on the second death. The appropriate forms and supporting documentation should be sent to HMRC by the executor or personal representative dealing with the estate.
Giltinian and Kennedy in Horsham can advise on a range of IHT planning strategies, which may include:
- Making the most of reliefs, including business property and agricultural property relief
- Making the best use of exemptions
- Ensuring that your Will and estate plan are tax-efficient and up-to-date
- Using trusts to manage your assets and any income generated
- 'Generation skipping', so your estate passes directly to your grandchildren
- Lifetime gifts of assets
- Life assurance policies
- Valuing your business
Through a lifetime programme of IHT and estate planning, you can reduce the liability to IHT, protect your family's wealth and help to ensure that your estate is distributed in accordance with your wishes.
The experienced team at Giltinian and Kennedy can assist with a range of tax planning issues. As well as helping to calculate your IHT liability, we can deal with forms for probate, and provide effective strategies to enhance your business and personal wealth.
Contact Giltinian and Kennedy today for further inheritance tax information and planning strategies in the Horsham area.