When you die, funds from your estate are used to pay inheritance tax (IHT) to HM Revenue and Customs (HMRC). Many people put off inheritance tax advice as they believe the only way to mitigate it is to pay for an expensive insurance policy but this is a common misunderstanding. Arrange a meeting with one of our advisors today to assess if you will be liable to pay any tax on your estate and to find out the best way for this to be mitigated.
There’s normally no inheritance tax to pay if either:
If you give away your home to your children (including adopted, fostered or stepchildren) or grandchildren, your threshold can increase to £500,000.
If you’re married or in a civil partnership and your estate is worth less than your threshold, any unused threshold can be added to your partner’s threshold when you die. This means their threshold can be as much as £1 million.
Currently the standard IHT rate is 40%. It is charged on the part of your estate that’s above the threshold.
Example: Your estate is worth £500,000 and your tax-free threshold is £325,000. The inheritance tax charged will be 40% of £175,000 (£500,000 minus £325,000).
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