We want to help maximise the inheritance you leave to your heirs. To achieve this goal it’s important to review what inheritance tax (IHT) could be payable, identify any exemptions and reliefs, and – crucially – plan ahead.
Your heirs will pay inheritance tax at the current rate of 40 per cent on the net value of any assets you own on your death, over £325,000 (the current upper limit for the nil rate band). Any assets you have given away in the previous seven years will also be liable for inheritance tax.
Recently, the Government announced a new residence nil rate band (RNRB) to assist in reducing the amount of IHT individuals have to pay on their main home. This doesn't come in to force until 2017-18 and it will be stepped to gradually increase to £175,000 by 2020/21, although this will have conditions and restrictions attached.
When planning to minimise inheritance tax liabilities for your family there are a number of exemptions and reliefs from IHT, to be considered. These include:
- the spouse exemption;
- business property relief; and
- agricultural property relief.
You could also consider donations to charity. However, all of these have conditions attached to them. By relying on out-of-date advice or common misconceptions, it is easy to fail to qualify. Our specialist team based across the UK and worldwide has the experience and knowledge to effectively help you plan ahead and avoid inheritance pitfalls. We can help you maximise the amount that you leave to your heirs, without leaving a mess for your executors to sort out on your death.
The earlier we start planning the better
Through careful planning, RSM can help you manage your IHT position. We can work in partnership with you to plan ahead and review your will(s) to ensure that these are drafted in a tax-efficient way. We can also assist if you own assets overseas, or are a UK resident non-domiciled individual, where it might also be necessary to take advice in overseas countries. We can ensure that the wills drafted in each country do not contradict one another, and that you can make the most of the advantages provided by double tax treaties. We can also help you consider alternative structures for holding assets to reduce IHT liability. In some cases the use of trusts or personal investment companies may be appropriate.