Inheritance Tax

Inheritance Tax (IHT) is payable if a person’s estate, including their property, money and possessions is worth more than the IHT threshold when they die.

There is a tax-free allowance called the ‘nil-rate’ band, which is currently £325,000. If the value of the estate exceeds this figure, and the estate isn’t left to a spouse, civil partner or a charity, (and isn’t eligible for reliefs such as agricultural or business relief) then the excess will be liable to IHT at 40%.  

From April 2017, estates have benefited from an additional residential nil-rate band (RNRB) which is currently £175,000, where the deceased’s residence is left to their direct descendants (children, step-children, adopted and fostered children and their respective spouses and civil partners). Where an estate has a net value of more than £2m, the RNRB is withdrawn at a rate of £1 for every £2 over this threshold.  

If the nil-rate band and RNRB are both rolled over unused on the first death to the surviving spouse or civil partner, on the second death this would mean there could be a tax-free nil rate band of £1m available.  

The rules involved in Inheritance Tax are complex and it is for this reason that it’s important to discuss your situation with us, as then you will be able to understand its potential effects on you, whether your loved ones will lose out on some of their inheritance and, what we can do to reduce or even eliminate its effects.  

INHERITANCE TAX PLANNING, WILL WRITING, TRUSTS AND TAXATION ARE NOT REGULATED BY THE FINANCIAL CONDUCT AUTHORITY  

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Tel: 01752 340183   Email: admin@excaliber-ifa.co.uk