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Iceni Financial Advisers

Inheritance Tax Planning. More and more people are concerned that they will pay inheritance tax on their loved ones’ estates. Ultimately, this can be a huge shock to bereaved families.  Moreover, this can often be a direct result of increases in property value.

Accordingly, are you aware:

  • Inheritance tax is a 40% tax paid by your heirs.
  • Meanwhile, the current nil-rate band (2024//2025) is £325,000. Besides, there is an additional £175,000 allowance if you leave your primary property to a close family member.
  • Furthermore, if you leave your estate to your spouse, they will not have to pay any inheritance tax.
  • You can inherit your spouse’s nil rate band and property allowance if they have not used them. Subsequently, meaning there is a potential for a £1,000,000 estate to be inherited tax-free.
  • Consequently, it is possible to take out a life insurance policy to cover a potential inheritance tax liability.
  • Also, you can make a charitable donation to reduce the value of your estate.
  • You can make small annual gifts within the tax allowance.  In fact, this can be a lovely way to help those important to you.
  • Additionally, you can decide to gift larger assets to your beneficiaries while you are still able to see them benefit

In Summary – Minimising Inheritance Tax

  1. Utilising your Nil Rate Band:
    1. Each individual can pass on £325,000 tax-free.  Married couples have a combined allowance of £650,000.
  2. Using the Residence Nil Rate Band:
    1. Leave your primary residence to direct descendants.  With the £175,000 allowance; the tax-free threshold for married couples is £1,000.000.00.
  3. Using your Gifting Allowance:
    1. Gift up to £3,0000 annually tax-free.  Plus smaller gifts of £250.00 per person and tax-free wedding or civil partnership gifts.
  4. Planning larger gifts with the 7-year Rule:
    1. Gifts exceeding exemptions become IHT-free if you live 7 years after gifting.  With taper relief reducing liabilities between 1-7 years.

Contact us for help with your inheritance tax planning. Call us today on 01603-957599 for your free initial consultation.