- The value of your estate is below the threshold at which Inheritance Tax is applied, or
- You leave everything to your spouse or civil partner, or
- You leave everything to an exempt beneficiary, such as a charity.
- The amount on which inheritance tax will be charged is £275,000 (£600,000 minus the £325,000 threshold).
- At the general rate, the tax payable will be £110,000 (40% of £275,000).
- The general rate can be reduced to a rate of 36% on some assets if the deceased leaves 10% or more of the 'net value' to charity in their will.
- Annual £3000 allowance
- Normal expenditure out of income
- Lifetime direct gifts with no immediate IHT. Some lifetime gifts are subject to IHT (i.e. those to discretionary trusts that are above the NRB), this is at a reduced rate.
- Taper Relief can mean that gifts given in the 7 years prior to the gift givers death may have a tax rate below 40%.
- Death benefits can be subject to Inheritance Tax if the estate legally has a right to the payment, or the member can dictate to whom any benefit is paid
- There is a lifetime transfer made of the death benefit when the member is in ill-health
- On lump sum death benefits where no discretion exists around who to pay the benefits to, Inheritance Tax may be charged
- If you’ve taken your tax-free sum, either in one lump sum or as part of multiple payments, but don’t spend or gift it before you pass away, it will be included within your estate and IHT may be charged
When do you pay Inheritance Tax?
How much money can you leave before Inheritance Tax?
What is effective Inheritance Tax planning?
Where can I find more information on Inheritance Tax planning?
The Government’s impartial retirement guidance will help you avoid the risks and think about what’s right for you.
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Our colleagues in Cardiff are always happy to help with your questions or to help you apply for a quote.
0800 048 2446
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