Inheritance Tax Planning Made Simple

Inheritance Tax (IHT) can be daunting, but with the right planning, you can minimise your tax liabilities and secure your legacy

Inheritance Tax

Inheritance Tax is a tax on the estate (the property, money, and possessions) of someone who's died.

In the UK, the current threshold for IHT is £325,000, above which estates are taxed at 40%

Who Pays Inheritance Tax?

Executors of the estate are responsible for ensuring any IHT due is paid before distributing assets to beneficiaries

Key Strategies for Minimising IH

Utilise Tax-Free Allowances: Take advantage of the £325,000 threshold and additional residence nil-rate band

Lifetime Gifting: Consider gifting assets during your lifetime to reduce the value of your estate

Trusts: Set up trusts to protect assets and potentially reduce IHT liability

Invest in Tax-Efficient Vehicles: Explore tax-efficient investments like ISAs and pensions

Common Mistakes to Avoid

Procrastination: Start planning early to maximise your options and minimise tax Ignoring Exemptions: Be aware of exemptions such as gifts to spouses or charities

Not Seeking Professional Advice: Consulting with financial or legal experts can help optimise your inheritance tax planning strategy