Inheritance tax future planning
With thousands of us separated from families and locked down in self-isolation thoughts are likely to turn to the future and what we can do to ensure our family are cared for once we are gone.
The number of Wills being written and reviewed as a result of the Coronavirus have spiked, as people take the necessary steps to ensure their wishes are met and families are supported.
As part of the process of writing or preparing a Will, it is important to consider how Inheritance Tax (IHT) may affect your estate and whether your beneficiaries could end up with a tax bill once you have passed.
At the most basic level, IHT is payable at a rate of 40 per cent on estates worth over £325,000 at the date of death (although this may be affected by certain rules and reliefs).
It can also become due on certain lifetime gifts of assets, at a reduced rate of 20 per cent.
Generally speaking, it is never too early to plan for IHT – especially if you have an estate worth more than £325,000, or £650,000 for married couples/civil partners, then it is worth exploring the options to reduce an IHT bill for your beneficiaries.
There are planning opportunities available that can mitigate the tax due on your estate and so it is important to review what options may be available to you at this time. Not all of the options may be appropriate for your needs, which is why it is advised that you speak with an experienced professional at the earliest opportunity when preparing a Will or arranging your estate.