Inheritance Tax Planning
Inheritance Tax is a complicated subject but one that anyone living in London or the South East of England should be aware of.
Each year in the Budget, the Chancellor sets the level of the Nil Rate Band, which is the upper value of an Estate before Inheritance Tax is payable. The current level is £325,000 and due to the current financial situation will remain the same for the next four tax years.
In October 2007, the Chancellor clarified the way in which Inheritance Tax was to be applied to married couples and registered civil partners. The Estate of the surviving spouse or partner (2nd to die) can utilise any unused portion of the Nil Rate Band from the first death, effectively giving a couple both Nil Rate Bands or currently £650,000 before incurring tax.
However, it is very important that married couples and civil partners make Wills to ensure that their Estates benefit fully from the Spouse Allowance. For unmarried couples where there is no Spouse Allowance, Nil Rate Band Discretionary Trust Wills should be considered as a means to mitigate this tax.
If you have concerns regarding Inheritance Tax and are worried that there are actions that you should be taking but haven't yet then please contact Consensus Wills
Will your Estate suffer Inheritance Tax at 40%?