Inheritance tax (IHT) is levied on your total wealth before it can be passed on to your beneficiaries. These include:
- Cash,
- Assets
- Property
- As well as some of the gifts you make during your lifetime
The current nil-rate threshold of £325,000 per person will go up to £500,000 by year 2020/21, if a main residence allowance is available in your particular circumstances.
IHT is levied after deductions such as mortgage and reasonable funeral expenses, as well as final income tax and capital gains tax liabilities accrued prior to death have been deducted.
Tax at 40% is due on anything above £325,000 per person.
If you are a married couple or civil partners you can pass your possessions to each other tax-free. The remaining tax-free allowance of the first spouse or partner gets passed on to the surviving spouse or partner.
At Delta Accountancy, we can help you reduce – possibly even eliminate – the potential IHT charge with our specialist advice and careful tax planning.
To get maximum benefit out of your tax situation, we can combine our IHT advice with advice on trusts, remuneration planning, and capital gains tax, as well as the preparation of your personal tax return.