Dorset Homeowners Can Save Tax

Over the last 10 years property prices have risen more strongly in Dorset than nearly anywhere else in the UK. As a result, an increasing number of families in Dorset have estates which now fall into the Inheritance Tax (IHT) bracket. IHT saving methods that Paul Solomons advocates include:

1. Assess your wills. For instance, it is possible for married couples to save over £100,000 in IHT by preparing a well drawn will, incorporating appropriate nil-rate band discretionary loan trusts. Make use of the annual £3,000 individual gift exemption. If you did not make a gift in the last tax year, the gift can be increased to £6,000 tax free.
   
2. You can also make gifts on the marriage of your children or grandchildren. A parent can give a tax-free gift of £5,000 and a grandparent £2,500.
3. Make a potentially exempt transfer. An outright gift of any sum during your lifetime will usually become tax free upon the 7th anniversary of the gift.
4. Gift any excess income. If you can clearly show and record that your net income exceeds your normal expenditure you can gift the excess free of tax.
5. Any gift to a registered charity is tax free. As such, if you have a taxable estate, a gift of £10,000 to your chosen charity woudl save £4,000 in IHT.
   

Paul comments "Tax changes in the Government’s Finance Act this year have made it more difficult to use trusts as a tax planning device, but there are still a number of ways in which to save IHT." Frettens provide a full range of specialised legal services to private and commerical clients, with a modern, common sense approach.