Get the Most Back from Your Inheritance Tax Service
The passing of a loved one is a difficult time that introduces challenges and responsibilities that you might never have encountered before; both financial and emotional. One of the biggest financial struggles that people have to deal with after the passing of a loved one is inheritance tax.
There is no guarantee that you’ll have to pay inheritance tax when a person dies, but for estates of a certain size, it’s unavoidable. There are many inheritance tax services that can step in to help you prepare for the inheritance tax that your beneficiaries may have to pay upon your death, as well as providing advice and guidance if you find yourself responsible for paying inheritance tax on an estate.
What Is Inheritance Tax?
Put simply, inheritance tax is the tax owed on the estate of a deceased party. This includes all property owned by the party, any additional assets and possessions, as well as any money.
The tax is a one-off payment and is made to Her Majesty’s Revenue and Customers (HMRC). The responsibility of paying the inheritance tax falls to the individual appointed as executor of the will, or in the event of there being no will, the administrator of the estate.
However, special scenarios, like monetary gifts or income generated through inherited property, may also incur additional inheritance tax charges. In all scenarios, getting the advice of a top solicitors in the UK that are trained in inheritance tax, can be of the upmost benefit.
How Much Inheritance Tax Will Need to Be Paid?
The exact amount of inheritance tax payable will vary from estate to estate, and in a lot of cases, no inheritance tax is payable at all. The threshold for inheritance tax is £325,000 in the UK, which means that all property, possessions, and money, below the value of £325,000, will be free of inheritiance taxation requirements.
Tax may also not need to be paid if the full estate is left to a spouse/civil partner, or the beneficiary of the estate is exempt from inheritance tax, such as in the case of the estate being left to a charity.
The recent addition of The Residence Nil Band Rate (RNRB), also means that an additional tax-free allowance can be made to account for a home allowance, in some cases. This is currently set at £125,000 but will rise on an incremental basis until 2021.
If your estate does exceed the threshold of £325,000, without the addition of the home allowance, the remaining assets will be taxed at a rate of 40%. With the addition of the home allowance, the rate would be 40% after the threshold of £450,000.
What Can an Inheritance Tax Service Offer?
Inheritance tax services can help you to plan for, and potentially minimize, the amount of inheritance tax that your loved ones will have to pay upon your death. Services can also help you to deal with inheritance tax after the death of your loved one. By speaking to top London solicitors who specialise in inheritance tax, you can get a clearer picture of where you, and the estate you own or are responsible for, stand in relation to inheritance tax.
While gifting your estate to your partner can eliminate the requirement to pay inheritance tax, it’s only valid until such as point where your partner passes away. There are a number of other ways that you can legally reduce your requirements to pay inheritance tax or make inheritance tax easier to pay, that your London lawyers can advise you on:
- Gifts made to friends or relatives up to a certain limit
- Charitable donations that are able to reduce tax rate
- Taking out life insurance policies
- The establishment of trust funds for children under the age of 18.
- The use of relief and exemptions
Paying Inheritance Tax
If an estate is tied-up financially, then paying inheritance tax can be a difficult and stressful time, commonly resulting in the need to sell off assets. There is also normally a short time frame imposed on the payment of inheritance tax, of 6-months, although this can be extended to account for payment instalments in some situations.
Whether you’re trying to minimise the amount of inheritance tax your loved ones will need to pay, are looking for advice about paying inheritance tax, or need guidance with your will, you can contact Gulbenkian Andonian for helpful and friendly legal advice.