Few taxes are more disliked than inheritance tax (IHT).
People perceive paying taxes on cash and assets generated from already taxed income to be unfair and, unless you take some well-considered advice, HMRC could end up being the major beneficiary of your hard work rather than family and loved ones.
Today, even modest estates will be affected by IHT but the well-advised can take steps to significantly reduce the liability or even avoid it altogether. The trick is to plan well in advance.
Although people mainly think of IHT as a tax on death it can also be payable during your lifetime. You need to think about IHT if you are undertaking any transaction which involves a gift. IHT can also be payable when you make transfers into most trusts.
IHT does not just affect those with large estates. Without the right planning, you could end up passing on just 60% of your wealth to your loved ones. They might even need to sell assets to pay the IHT bill, which can be particularly upsetting if that asset is the family business, or a much-loved family home.
A well-drafted and up-to-date will is essential to ensure the right individuals benefit from your estate, and that any relevant reliefs can be claimed. Using exemptions and reliefs such as business property relief (BPR) and agricultural property relief (APR), can also reduce your exposure to IHT as can undertaking relatively simple reorganisations of your assets to maximise the available reliefs. At PKF Francis Clark, we have significant experience in planning to ensure you are taking full advantage of all statutory reliefs. The key is to ensure you are aware of your options.
Using their expert knowledge and experience, our specialists will provide all the advice you need to reduce your exposure to IHT and minimise the tax that your heirs will have to pay. Please contact the specialist team in your local office to find out more.