INHERITANCE TAX

What is inheritance tax (IHT)?

Inheritance Tax (IHT) is a tax on the estate of someone who has died, including all property, possessions and money. Even if there is no Inheritance Tax to pay, you’ll still need to report it to HMRC.

How Could it impact on you?

Without the correct advice and careful financial planning, HM Revenue and Customs could be the biggest single beneficiary when you die.

Inheritance Tax (IHT) has an increasingly broad reach. The impact on a modest estate can be dramatic, on a large estate, it can be huge.

There are several options available that can help mitigate Inheritance Tax:

  • have your Will written and planned correctly to save the maximum amount of tax*
  • transfer assets through the prudent use of lifetime gifts
  • create a tax-efficient fund to enable the beneficiaries to meet the tax liability without disturbing the family wealth. Under current IHT legislation, pensions can play a considerable role in estate planning.

With four leading law firms, we offer help covering a range of legal services including Inheritance Tax, marriage issues and general tax planning.

The value of this investment will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than the amount initially invested.

The levels and bases of taxation and reliefs from taxation can change at any time. The value of any tax relief depends on individual circumstances. 

*Will writing involves the referral to a service that is separate and distinct to those offered by St. James’s Place. Wills are not regulated by the Financial Conduct Authority.

Inheritance Tax nil rate Band

The current IHT nil rate band is £325,000 per person, below which no Inheritance Tax is payable. This is the amount that can be passed on free of IHT as a tax-free threshold. A reduced rate of IHT of 36% (reduced from 40%) applies where 10% or more of a deceased’s net estate after deducting IHT exemptions, reliefs and the nil rate band is left to charity.

Main Residence Nil-rate Band (RNRB)

The RNRB came into effect on 6 April 2017. The RNRB was introduced in stages and the allowance increased to the present maximum level of £175,000 from 6 April 2020. The allowance is available to the deceased person’s children or other direct descendants.

Budget 2021: inheritance tax thresholds have been  frozen till 2026. 

There is a tapered withdrawal of the additional nil-rate band for estates with a net value of more than £2m at a withdrawal rate of £1 for every £2 over this threshold.

The legislative provisions have been drafted to ensure that an estate will be entitled to the RNRB where an individual downsized to a smaller property on or after 8 July 2015. This is the date the measure was first announced.

Testimonials

I have known her as our family Financial Adviser for about 10 years. She has always put my interests first and given sound advice. I found her to be pleasant and trustworthy. Her service and support has always been exceptional. I get great pleasure in recommending her to anyone.
Thurairatnam Kathirgamakarthigeyan
Retired Eye Surgeon
Andrea has been wonderful, and I feel confident in discussing my financial matters with her as I know she will treat my affairs confidentially. She has always been there whenever I needed - literally with a click of a button and the support, she provides is extraordinary. She has gone out of the way to help me on a few occasions. I will not hesitate to recommend her to anyone.
Sandy Shiralkar
Consultant Vascular Surgeon
Andrea has provided us with exceptional service and advice. We feel that Andrea has listened to what we want and need and has helped us to build a robust retirement plan. We would recommend Andrea to our friends and family.
Claire Richards
Manager

Get in touch To Find Out More

The Partner together with St. James’s Place Wealth Management plc are the data controllers of any personal data you provide to us. For further information on our uses of your personal data, please see the Partner’s Privacy Policy.