Inheritance Tax Planning

What is Inheritance Tax and does it affect me?

Inheritance Tax is usually paid if a person’s estate (the sum total of all their assets) is worth more than £325,000 when they die.

Although it used to impact only the very wealthy, the rise in house prices over the last ten years means that more people have had to pay Inheritance Tax.

If the value of your estate - including your home and everything you own - is greater than £325,000 (in the tax year 2015/16), then you could be liable for Inheritance Tax.

In 2013/14 a total of £3.4 billion was paid in Inheritance Tax (Source: HMRC)

To see if you could be liable, why not take a moment to use our Inheritance Tax Calculator.

Are there different Inheritance Tax rates?

The rate of Inheritance Tax is the same for everyone, regardless of what level of income tax you pay and is currently 40% on anything above £325,000. The only way the rate may be reduced is if you choose to leave at least 10% of your estate to charity. The rate may then be reduced to 36% on some assets.

Transferring Inheritance Tax thresholds

Since 2007 it has been possible for a husband or wife to inherit their deceased partners unused Nil Rate Band on the second death.

Therefore a couple/civil partner with an estate of £650,000 would (assuming they both have their full Nil Rate Band) not have any liability to Inheritance Tax should both die. It is worth noting that this isn’t an automatic process and a claim needs to be made following the 2nd death by the deceased’s executors or representatives.

An estate is exempt from Inheritance Tax if the deceased left everything to their husband, wife or civil partner, who lives permanently in the UK.

Married couples and civil partners can give any value of gifts to each other during their lifetime without Inheritance Tax being due on them. This is known as ‘spouse or civil partner exemption’.

How can we help you?

Inheritance Tax is often called a 'voluntary' tax, because there are perfectly legal ways of reducing the amount you have to pay - it just involves some careful planning.

Our wholly owned subsidiary Newcastle Financial Services Ltd (NFSL) offers an Inheritance Tax Planning Service, where a Financial Planning Manager can take you through your options so you can do everything possible to ensure the right inheritance tax planning arrangements are in place.

Get in touch with us today on 0345 600 4330 to arrange a no-obligation appointment with an NFSL Financial Planning Manager.

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

Newcastle Financial Services Limited offers a 'restricted advice' service which means that they offer advice on products and services from a limited number of companies available through Openwork Limited.

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    0345 600 43309am - 5pm Monday to Friday (local rate charge but calls from mobiles may cost more)