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Passing on your wealth

When you’ve worked hard for all of your life to get where you are, providing for those that you care about is important. Yet nothing is ever that easy.  Just owning your own home and having enough money to provide a good income in retirement may leave your estate with a chunky Inheritance Tax bill. We may be able to help mitigate this. If you would like to have control over what happens to your assets after your death, we believe that effective estate planning is crucial.

Inheritance Tax exposure

If you don’t put a significant plan in place for what happens to your assets after your death, more of your estate could be exposed to Inheritance Tax. It’s only right to ensure that the right people receive the right amounts at exactly the right time. Currently, IHT is charged at 40% on all that you own over the limit of £325,000 plus any RNRB you may qualify for. So, if your assets are worth £1 million, there’s a potential tax liability of £270,000 (40% of £675,000). Of course, it should be noted that your estate can pass tax free to your spouse or registered civil partner upon your death. This means a minimum joint allowance of £650,000.

The main residence allowance

On top of the main IHT allowance, in the 2017/18 tax year, the government introduced the main residence allowance, technically called the “residence nil rate band”. It is only valid on a main residence and where the recipient of a home is a direct descendant. A direct descendant is classified as children, stepchildren and grand children.  It is being gradually phased in and from the 2020/21 tax year the amount will be £175,000 for an individual, or £350,000 for a couple. Combine this with the standard IHT allowance and a married couple can achieve a tax-free allowance of £1 million.

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The possibilities

Firstly, estate planning is more than just tax. From the creation of wills and power of attorney, to options like making the most of exemptions, gifting any excess income in your lifetime and creating trusts, there are a good number of options available. What is clear is that everyone has different requirements and reasons for doing so. One size does very much not suit all. We work with you to create the right framework to maximise your wealth.

Find out more

If you’d like to find out more about our approach and how we can help you, then just get in touch.

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