When considering the planning of your Estate, you will need to consider the position with regards to Inheritance Tax. Below are some standard questions often raised concerning Inheritance Tax.
Q: What is Inheritance Tax:
A: Put simply Inheritance Tax is a tax on the Estate (which includes property, money and possessions) of the person who has died.
Q: Is Inheritance Tax payable in every case:
A; No if the value of your Estate is below £325,000 threshold or you leave everything above the £325,000 threshold to your spouse/civil partner or a charity.
If you are married or in a civil partnership and your estate is worth less than your threshold, any unused threshold can be added to your partner’s threshold when you die. This means their threshold can be as much as £1 million.
Q: If the Estate value is below the threshold do I still need to report it?
A: Yes even if your Estate is below the threshold you will still need to report to HMRC
Q: What are the current rates of Inheritance Tax:
A The current Standard Inheritance Tax is 40%. This is only charged against the part of your Estate that is above the threshold.
Q: Can this rate of Inheritance Tax be reduced:
A: Yes the estate can pay a reduced rate of Inheritance Tax of 36% on some of your assets if you leave 10% or more of the net value to Charity within your Will.
Q: Who pays the Inheritance Tax:
A: Funds from your Estate will discharge the Inheritance Tax payable to HM Revenue & Customs and is normally done by the person dealing with the Administration of the Estate, known as an Executor.
Inheritance Tax can be a minefield to deal with but if Fisher Jones Greenwood can assist you in the Administration of an Estate or the planning of your future then contact a member of our Wills, Life Planning, and Probate team on 01206 835261 or email [email protected].