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About Inheritance Tax

About Inheritance Tax

Tax planning

All assets on a deceased's estate over and above the Inheritance Tax threshold are charged at the Inheritance Tax rate of 40%. The Inheritance Tax threshold is £300,000 for the tax year 2007-2008and £312,000 for the tax year 2008-2009.

Inheritance Tax is now becoming an issue for many people and our department can advise you on the best way to try and reduce the tax bill.

Before death

There are a number of ways to reduce your exposure to Inheritance Tax during your lifetime. Our department can advise on the best way to achieve this and the implications for both Inheritance and Capital Gains Tax purposes.

Effective tax planning Wills are a method of avoiding Inheritance Tax for married people.

After death

One of the best methods of tax planning after death is by varying the terms of the Will or intestacy to make the estate of the deceased and the survivors more tax efficient. This can be done by drawing up a document called a Deed of Variation within two years of death.

A Will can be rewritten by a Deed of Variation to redirect assets of the deceased person to another person or persons of their choice. This could save Inheritance Tax.

There are a number of ways to achieve the tax saving dependant on the assets of the deceased, the survivors and the way those assets are held, and we can provide advice on the most tax efficient and practical solution for your own particular circumstances.

One of the most common scenarios where a Deed Variation may be effective is where a husband or wife dies and leaves the entire estate to the surviving spouse. The assets now inherited from the deceased might take the surviving spouses estate over the Inheritance Tax threshold leaving them liable for Inheritance Tax.