First things first – inheritance tax doesn’t affect everyone. We can help you find out if it might affect you.
Who does it affect?
It depends on how much your estate is worth when you die. And your estate isn’t just your money. It’s everything you own, from furniture and jewellery through to property and cars (note any debts you have will reduce the value of your estate). It can also include gifts you’ve made within the last seven years. And if the value of your estate exceeds a certain limit (aka your nil rate band), your estate will typically have to pay 40% inheritance tax on anything above it.
What's my inheritance tax threshold?
- £325,000 if you’re single or divorced.
- Up to £650,000 if you’re married, in a civil partnership or widowed.
A ‘residence nil rate band’ is gradually being introduced, currently worth £150,000 per person. The residence nil rate band applies if you are passing on a property that you have lived in, to direct descendants, and it can be used in addition to your nil rate band.
There are lots of things you can do now to reduce the amount your estate will potentially have to pay later. We can help you find out how much your estate is worth, whether or not inheritance tax could apply and what to do if it does.
Some inheritance tax plans can take up to seven years to come into full effect, so it can pay to plan early.