The only thing certain in life is death and taxes!
BBC news recently reported that Guildford has been named the “Inheritance ‘Capital’ of the UK”.
During the 2015/16 tax year, as many as 658 families in the Surrey town were subject to inheritance tax costing them, on average, a staggering £231,000 each.
The current threshold for inheritance tax is £325,000 and, unless an exemption or relief is available, anything above this amount is taxed at 40%. Business assets, agricultural land, charitable donations and assets passed to spouses can all attract relief from inheritance tax.
In addition, the residential nil rate band was recently introduced. This allows an additional tax free allowance of up to £125,000 if your main residence is being passed to your direct descendants.
Despite these allowances, for many who own their own house, the £325,000 threshold, which has been the same since 2009, is very easily reached.
Making gifts each year, as well as placing assets into special investments, are some of things you can do to reduce the tax payable by your estate upon your death.
Birkett Long can advise on appropriate tax planning to help you reduce your inheritance tax liability, ensuring as much of your estate passes to your loved ones as one possible.