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Inheritance Tax Planning

If you don’t plan ahead, 40% of the value of everything you own above £325,000 could go to the taxman when you die.

 

Tax Issues

 

Inheritance tax doesn’t only affect the very wealthy. Rising property prices and inflation have meant it’s now an issue for an increasing number of people.

 

For the tax year 2017/18, inheritance tax is payable at 40% on all assets over £325,000 (the ‘nil rate band’), subject to certain exemptions and reliefs.

Under current legislation a surviving spouse can inherit the deceased partner's nil rate band of £325,000. 

 

Residence Nil rate Band

More commonly known as the 'family home allowance', the Residence Nil Rate Band will work on top of the usual £325,000 Basic Nil Rate Band (£650,000 for married couples/civil partnerships), allowing people to pass on a property to their children or grandchildren and save them thousands in death duties.

The Residence Nil Rate Band is transferable and will be phased in over four years; starting at £100,000 in 2017/18, rising £25,000 a year to reach £175,000 by 2020/21.

Eventually, a couple will be able to combine their Basic Nil Rate Band and Residence Nil Rate Band allowances to pass on a property worth £1 million.

The new allowance is only available on property being passed to ‘direct descendants’, which includes children and grandchildren, as well as stepchildren, adopted and foster children.

That means brothers, sisters, nieces, nephews and other relatives aren’t eligible to benefit from the Residence Nil Rate Band, even if you have no direct descendants to pass your property to.

 
Awareness

 

There are many ways to reduce your inheritance tax liability, but it’s vital to strike the right balance between tax mitigation and having access to your money when you need it. 

 

We can discuss the situation with you to explore the right route for your particular situation. 

 

HMRC

 

HM Revenue and Customs practice and the law relating to taxation are
complex and subject to individual circumstances and changes which cannot
be foreseen.

Call us now

 01204 238 500

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The value of investments and any income from them can fall as well as rise and you may not get back the amount invested.

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Areas Of Advice

Local Independent Financial Advisers based in Ramsbottom, Bury, Lancashire, we cover all aspects of Financial Planning in Lancashire, Cheshire and Greater Manchester

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The information on this website is for use of residents of the United Kingdom only.  No representations are made as to whether the information is applicable or available in any other country which may have access to it.  Holcombe Financial Services is a trading name of Holcombe Wealth Management which is authorised and regulated by the Financial Conduct Authority

If you wish to register a complaint, please write to or telephone Holcombe Financial Services, 9-11 Peel Brow, Ramsbottom, Bury, BL0 0AA 01204 238 500.

A summary of our internal complaints handling procedures for the reasonable and prompt handling of complaints is available on request and if you cannot settle your complaint with us, you may be entitled to refer it to the Financial Ombudsman Service at www.financial-ombudsman.org.uk or by contacting them on 0800 023 4 567

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