Inheritance tax (IHT) has the potential to take a huge stake from your wealth or property. If you’re planning on passing these onto your children or grandchildren, carry on reading to find out more. With the correct expert advice from our highly qualified professionals, you won’t have to pay Inheritance Tax. Come and speak to our team today at CBHC, where we will offer professional advice and accounting services, Chelmsford. If you want to reduce your Inheritance Tax Bill, or completely remove it, we have some top tips which may help you.
Use your Pension
First things first, use your pension to your own advantage. Recent changes to the taxation on pensions have meant that your pension is outside of your estate. Therefore ensuring that whatever is passed down isn’t taxed. Ultimately giving you full access to your IHT. What people don’t understand is that you can pass your pension down generations. Our team are able to explain this in more detail too.
Furthermore, being generous and giving gifts away can save you money each tax year, if done in the correct way. Giving money away when you’re alive can help you massively when it comes to IHT on your overall wealth, this can vary from once a week, x2 a month or even once a year. You won’t have to pay the tax if you can prove you’re not lowering the standard of your living in order to exchange gifts. In order for your income to be free of IHT, you must keep an accurate track on the gifts you’re frequently giving out.
Is it possible to Amend a Will
Is it possible to amend a will if a late family member has left an inheritance in a non-tax efficient way? The answer is yes. You have up to 2 years to create a deed of variation, and to change the inheritance from being left to the child of the late family member and leave it to the grandchild.
Without knowing it everybody has a nil-rate band that can be handed over to your partner/spouse. But what is the ‘nil rate band’? This is essentially part of your estate which is above a specific IHT threshold, and will be paid at a high tax rate of 40pc . The inheritance tax threshold begins at £325,000, which is enough to raise concern for most homeowners who live in areas where house prices are exceptionally high, but you can pass everything you own onto your partner, doubling their nil-rate allowance.
Can I leave my Family Home to my Children ?
Are you planning on passing your family home onto your children or grandchildren? If you decide when writing your will that you’re going to leave your main residence to a family member. There is an extra £150,000 per person exemption available. As part of the estate you can pass down the equivalent of £1m worth of assets without paying IHT.