INHERITANCE TAX PLANNING

Many people don't realise that inheritance tax is a problem for them, however the current threshold (nil rate band) is £325,000 and inheritance tax is payable at 40% above this.

Any amount can be left tax free to a spouse.

A change introduced in 2007 allows married couples to carry forward any unused nil rate band allowance from the first spouse to die to be used on the death of the second spouse.

Married couples therefore can leave £650,000 tax free, whichever order they die.

Unmarried couples do not have this privilege

Well written Wills (including Nil Rate Band Discretionary Trusts) can enable unmarried couples to benefit from the same double tax allowance as married couples - potentially saving up to £130,000 in inheritance tax.

 When assessing your estate for inheritance, the following is included:

• Any Gifts made in the previous 7 years
• Properties you own, including foreign ones or second homes
• Bank & Building Society accounts
• Personal goods
• Motor vehicles
• ISAs, PEPs, TESSAs
• Stocks and shares
• Businesses
• Life policies and pension lump sums (unless in trust) 

Business assets can be protected from Inheritance Tax. See the "Wills for those in Business" section of this website.

To discuss this further, please contact North Country Wills.