Inheritance tax planning

Inheritance tax (IHT) is no longer a concern just for the wealthy. It is a growing worry for many people, especially homeowners who have benefited from growth in the value of their properties. Property is not the only asset that makes up a person’s estate. Your estate also includes: your contents and possessions, your savings and investments, your pension fund and any life insurance not in trust.

Even with the effective doubling of the IHT threshold for married couples (and civil partnerships) many people are still being caught by this tax. However, IHT can be a mitigated tax  - that is, one that you can easily reduce, or avoid altogether, by proper planning.
Over the years, the IHT thresholds have, in real terms, stealthily fallen. The threshold (nil-rate band) did not kept pace with property inflation and, as such, more and more people are falling into the trap of paying inheritance tax.

IHT is payable at a flat rate of 40% on assets above the nil -ate band. Unlike many other taxes though, there are plenty of things you can do now to make sure you pass as much of your wealth on to your family and friends, and not the taxman.

Notes:

Levels and bases of, and reliefs from, taxation are subject to change and their value depends on the individual circumstances of the individual.