Everyone wants to safeguard their financial future and pass on their wealth to their children. And, the key to maximizing the assets you leave your loved ones is looking after your personal wealth.
At Pindoria, we have an experienced and knowledgeable team of inheritance tax planning solicitors who have been helping people manage their assets by advising them on the right inheritance strategies and efficient tax options.
Pindoria Solicitors Inheritance Tax Advice
In layman’s terms, Inheritance tax is tax paid on the estate of someone who has died. The estate
could include money, property and possessions. A Will forms the basis of inheritance tax, and a poorly drafted Will can attract disputes and extra expenses and time.
We start planning and managing your taxes by first having a detailed one-on-one discussion to learn about your tax objectives, specific requirements and pain points that might arise in the future. We recommend you to talk to our inheritance tax solicitor, if:
- You are cohabitating
- Sharing property with a person other than your spouse or civil partner
- You are recently divorced, recently remarried, dissolved civil partnership, or entered into a civil partnership
- You have children under 18 years of age
- You have children from different relationships
We understand that knowing that all the right legal procedures are taken care of and that your wealth management is in the right hands will give you the peace of mind. Our professionalism is a well-known fact, and our inheritance solicitors are willing to provide every client personal attention and prioritize their best interests always.
What is Inheritance Tax?
Inheritance tax comes into effect when assets are passed upon death. Your estate – including your property, money and other possessions can be safely gifted to your spouse or civil partner without taxes.
Currently, the inheritance tax rate is 40% of your estate. Besides, if the total value of your estate is assessed to be below the £325,000 inheritance tax threshold, it is known as the nil-band rate. It means if the value of your property is above the threshold, the part of your estate that is above the threshold will only be subject to 40% IHT.
To use the inheritance tax threshold, married couples can combine their allowances to double the nil-rate band – bringing the amount to £650,000.
Call us to know more about how much inheritance tax is for your estate as IHT calculation can get complicated.
How does inheritance tax work?
Our expert solicitors have been handling a number of taxable inheritance cases, and these are some of the frequent questions we get asked.
‘Who pays inheritance tax?’
In case there is a will, the executor of the will is responsible for paying the tax to the HMRC.
The beneficiaries of the will – persons inheriting your estate – will not be required to pay tax on the inherited property.
Finally, inheritance tax is paid by the people receiving gifts, provided you don’t survive more than 7 years after gifting, and the gift amount is more than the inheritance tax limit of £325,000.
You should remember that if the value of your estate is calculated to be less than the threshold of £350,000, then that is how much inheritance is tax-free.
‘When is inheritance tax due?’
IHT should be paid to the HMRC within 6 months after the death of the person.
How do you avoid inheritance tax?
Making a will can make sure your property and assets are distributed according to your wishes, and paying IHT can considerably be avoided.
Understanding your tax-free inheritance threshold also gives you an idea about planning your estate and assets property. For individuals, the nil-band rate is £325,000, and it can be doubled for spouses or civil partners.
Another tip to avoid taxable inheritance is by gifting your assets. This works only when you survive for more than 7 years after gifting.
Anyway, there are several smart tips on how to avoid taxes on inheritance that can help you reduce or avoid the tax due, and we suggest you get in touch with our solicitors to work out the best method for your particular need.
When is inheritance tax paid?
The inheritance tax due amount should be paid within 6 months after the death of the person. If IHT is not paid before the end of 6 months, HMRC will start levying interest. The standard inheritance tax on property is charged at 40% on the value of the estate above the IHT threshold of £325,000.
If you are the married spouse or civil partner of the person who died, any assets left to you by that person are exempt from death duties. Additionally, if the person who died did not use their IHT allowance, it can get added to the surviving partner’s allowance.