I’m worried that when I die my money will be taken in taxes and none left for my family
- If your estate totals in excess of £325,000 then there will be Inheritance Tax to pay. Although this will depend on a number of factors, if your total worth is less than this amount there would be no tax issues
What is a ‘nil rate band’?
- This is the amount you can give away without Inheritance Tax being charged. Currently this stands at £325,000.
I am a widow, does this make a difference?
- If your husband left all his estate to you then you will have inherited from him an additional nil rate band. This means that you would have to have an estate of more than £650,000 before Inheritance Tax becomes a problem
What is an estate?
- Your estate comprises the total value of what you own when you die, plus the value of any gifts made in the preceding seven years. The capital value of any entitlement from a trust may also be added.
Who will pay Inheritance Tax due when I am dead?
- This is usually paid by your personal representative/executor of your Will, from your estate.
Can I take steps to avoid paying Inheritance Tax?
Yes. Wills & Tax Partner Lee Young says, “The best place to start is with your Will. You need to ensure that it is set up as tax efficiently as possible, bearing in mind the available reliefs and exemptions. Anything left to your spouse is exempt from Inheritance Tax. Beyond that you need to ensure you are making use of the lifetime exemptions that apply to various gifts that you can make.” Succession planning is becoming increasingly essential because whilst house prices are rising the Inheritance Tax nil rate band has been fixed for a number of years. More people are therefore becoming liable to pay this tax.
We have offices in the Christchurch, New Milton and the New Forest. Our Wills & Tax team also cover Bournemouth and Poole. For a free initial chat, please call 01202 499255 and Lee or a member of the team will be happy to discuss any questions that you may have.