IHT is currently charged at 40% on the net value of your assets that exceed your Nil Rate Band. The Nil Rate Band has been frozen at £325,000 per person or £650,000 for a married couple until 2028. In certain circumstances, this can be increased to £1,000,000 per couple where their home passes to a direct lineal descendent.
For UK domiciled and deemed domiciled individuals, IHT is charged on their worldwide assets irrespective of where they are situated. For non-UK domiciled individuals, exposure is limited to UK situs assets and specific consideration is required for cross border tax issues. If you require support in this area we have a specialist international tax team.
Assets subject to IHT can include shareholdings in companies, your home, any other properties you own, your savings and investments (including any ISAs), your car, and any personal possessions.
Our award-winning tax professionals will review your personal position and assets to determine your IHT exposure and create a plan to mitigate this where appropriate.
We will provide advice on:
Gifting can be a great way of passing on wealth to your loved ones as well as reducing the value of your estate for IHT purposes. Read more.
Pensions are usually free of any IHT charge and are therefore seen as a relatively simple, effective way to reduce your IHT exposure whilst also ensuring you can still access funds, should you need them during retirement. Read more.
In most cases, there is a full IHT exemption for transfers between spouses and civil partners. This applies to both lifetime gifts and assets transferred on the death of one spouse. Care needs to be taken if one spouse is domiciled outside the UK as the spousal exemption can be restricted. Read more.
Under the current tax legislation in England and Wales, the same IHT tax treatment is expected to apply to married or civil-partnered couples. The rules may differ however in instances where couples are cohabiting. Read more.
If you want to know more about how we can help you manage, plan or invest for your future, please contact us.
Nicholas has been an excellent steward of the assets I inherited, and helped me to plan financially for the future. He has also been a much-valued liaison between the firm of solicitors dealing with several deaths in my family and helped transfer funds and assets into my investment portfolio tax-efficiently.
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Currently, IHT is charged at 40% on the net value of relevant assets which are passed on to your beneficiaries after death.
You may be able to leave up to £325,000 in cash or assets tax-free and receive an additional £175,000 allowance on your home if you are leaving it to a direct lineal descendant (and your total estate is less than £2,000,000).
The IHT Nil Rate Band has been fixed at £325,000 since 2009 and was again frozen in 2022 until 2028.
The Nil Rate Band (NRB) is the limit at which you should not have to pay IHT on your estate. The NRB is currently £325,000 per person or £650,000 for a married couple. In certain circumstances, this can be increased to £1,000,000 per couple where their home passes to a direct lineal descendent (the Residence Nil Rate Band (“RNRB”)).
Each person's estate can benefit from the NRB. A RNRB may be available in addition to the NRB.
IHT must be paid within six months of death. If it is not paid within six months, HMRC will start to charge interest.
An IHT bill can be paid by post or online.
Pensions are usually exempt from IHT, however there are instances where this is not the case. Whilst usually free from IHT, pensions can be subject to Income Tax if death is after age 75, so it is important to seek advice when thinking about how to pass on your estate in a tax efficient manner.
“What if I could grow my wealth in a tax-efficient manner?”
“What if I want to leave a lasting legacy for my loved ones?”
For most, retirement will be funded in the main by a pension. It is therefore vital you have a robust plan in place that will allow you to grow and protect your pension, both now and in the future.
The UK tax regime has several complex rules which impact you as a high-net-worth individual. With complexity comes confusion and misinterpretation which in turn, could mean you pay more tax than you need to, particularly in the case of Inheritance Tax (IHT). Below we debunk some of the myths surrounding IHT and planning opportunities to help protect your wealth for future generations.
While personal and family circumstances will differ for each couple, tax rules are the same for both LGBTQ+ and non-LGBTQ+ couples.
Inheritance Tax (IHT) was once regarded as a tax that only affected the very wealthy. However, rising property prices and a freeze on allowances mean many more people are facing a tax charge upon death. Everyone’s circumstances are different and it is important that (even those who might not consider themselves particularly wealthy) get proper tax and financial planning advice.
Inheritance Tax (IHT) planning isn’t something that can be looked at once and ticked off the list. As the value of your assets change, so must your plans.
Gifting can be a great way of passing on wealth to your loved ones as well as reducing the value of your estate for Inheritance Tax (IHT) purposes and general estate planning.
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