We all work hard for most of our lives to provide for the ones we love, however, there comes a time when we all pass on and leave our loved ones behind. This does not mean that we can’t still provide for them past this point. Inheritance planning is essential to ensuring your family reaps the full benefit of your estate all while incurring the least amount lost due to inheritance tax.
What is inheritance tax?
Inheritance Tax (IHT) is a tax on the estate of someone who has died. This includes all possessions, property and money.
How much is IHT?
The standard Inheritance Tax band can range anywhere between £325,000 to £1,000,000 for different reasons such as marriage and/or the value of your main residence. Calculating any potential IHT bills can be a daunting task, not to mention this is something you are going to want to get right as a mistake in calculations can cost thousands. Click the link below to the gov.uk website to read more about inheritance tax bands.
Who pays the IHT bill?
The responsibility for paying any inheritance tax bill falls to the individual managing the estate. This is often those named within your Will. An important thing to note is that the estate cannot be distributed or released until any inheritance tax bill can be settled. This means that your loved ones will be responsible for paying any applicable tax bill before receiving any inheritance they are entitled to. This often means selling properties or assets to raise the required tax bill.
What is inheritance planning?
Inheritance planning or estate planning can help you to ensure your family is cared for once you’ve passed, with your wealth distributed efficiently and with the least amount of tax liabilities. It can be extremely beneficial to think about inheritance planning and have something in place as soon as possible as there are ways to mitigate this tax that include life insurance policies and qualifying investments.
We deal with inheritance planning on a daily basis and we will be able to help you ensure that your loved ones are taken care of once you pass. Click here to get in touch for your free consultation.