- Contested Probate Solicitors
- Valid Will Requirements
- Disputing A Will
- Caveats And Injunctions
- Grant Of Probate Explained
- Executors Duties
- Letters Of Administration
- Distribution With No Will
- Claims For Dependents
- Cut Out Of Will
INHERITANCE TAX INFORMATION & UK PROBATE SOLICITORS
The current IHT tax exemption limit might sound like a lot of money to leave to your family after you die without incurring any Inheritance Tax, but it is surprising how quickly your assets can add up to exceed that amount. Given the price of housing nowadays, that alone can take you well over the limit without including anything else you may leave behind you.
That is why it is always a good idea to consult an inheritance tax solicitor who has extensive knowledge about tax planning and the potential effects that Inheritance Tax can have on your assets when you die. There are plenty of ways that you can legally avoid paying a lot of it, but only a professional will know them, which means that if you make a will without professional help you stand a very good chance of depriving your family of some of the assets they would otherwise be entitled to. What's more, Inheritance Tax kicks in at a frightening 40%, which could be a lot of money to lose to the tax man if you give him half a chance.
The best place to begin when you are making your will is to work out just how much your assets are worth. Many people forget something at this stage, which is why getting the help of a solicitor will mean you won't leave anything out. Something that is often forgotten is a benefit that only pays out upon your death, such as insurance your company may offer you for example.
One way that you can avoid a certain amount of Inheritance Tax is by giving members of your family sums of money as gifts each year. There is a cap on this amount but provided you live for seven years after you make each donation your beneficiaries will escape the tax itself.
While married couples can escape Inheritance Tax by leaving their entire estate to each other upon the death of one, the issues surrounding joint ownership of certain assets can be quite involved. This is why it is worth seeing a solicitor together to work out how to write wills for both people that will make the most of the tax free amounts that are available.
It is easy to think that you can escape Inheritance Tax by leaving everything to your spouse once you die, but this doesn't mean they will escape completely. A solicitor can tell you more about how a Deed of Variation can ensure that your spouse will be able to avoid paying this tax by redistributing assets in a different manner in the first two years after you have gone.
Whatever your own personal situation may be, you might be surprised by just how much your own estate would be worth. It is also important to remember that it is likely to increase even further in value as you get older and acquire more assets which go up in value themselves, so seeking the advice of a professional can save you a lot of money in the long run.
Our inheritance tax solicitors have extensive experience in helping their clients manage their assets and affairs in the best possible way when it comes to writing their wills. You can be assured that you will receive the best possible advice for your situation, and what's more the initial consultation is completely free of charge. This will give you an initial insight into what you should do to make sure you avoid as much Inheritance Tax as possible.
All you need to do is fill out the form on our site or call the number provided to be able to speak to one of our solicitors, to see how they can help you.
How Inheritance Tax Works
Our inheritance tax solicitors have thorough knowledge of UK inheritance tax (IHT). With the assistance of an experienced solicitor, you can plan your estate so that your assets are distributed according to your wishes rather than handed over to the tax collector. Inheritance tax is based on the value of your net assets, which can include lifetime gifts made within 7 years of your death.
Valuing Your Estate
Before a solicitor can provide you with accurate inheritance tax information, you will need to determine the value of your assets. In order to avoid the IHT, you will first need to calculate your precise net worth. Keep in mind that your total assets are much more than just the money in your bank account and your real property. For instance, you must also include things like company benefits, insurance policies and death in service benefits. It is also important that you have some idea of how you want your assets distributed upon your death.
With that information in hand, a solicitor can help you decide whether it would be financially beneficial for you to make gifts whilst you are alive. At the present time, there is no gift tax in the UK however, dependent on the law at the time of death, there is a very real possibility that inheritance tax will have to be paid on gifts if you pass away within a set number of years after the gift is made. This law is in force now (but of course may change as time passes)and was enacted to prevent individuals from circumventing IHT by making large death-bed gifts.
Tax on Gifts
The UK currently has no gift tax in place however when gifts are made, there is a potential for an inheritance tax liability to arise in the future, payable upon the death of the gift giver. Such counter intuitive possibilities make inheritance tax a particularly complicated area of the law. The current problem is that if you do not survive for at least 7 years after giving the gift, then that gift will be treated as part of your estate and tax becomes payable. To avoid the application of inheritance tax being payable on a gift made during your lifetime, it is best to give your assets away early. Death-bed gifts, nor any gifts currently within 7 years of death, will not accomplish your goal of tax avoidance. This is the type of matter that an IHT solicitor must consider whilst discussing tax avoidance with you. Tax avoidance of this nature is quite legal whereas tax evasion is unlawful and a criminal offense.
Decreasing IHT Liability
Our solicitors are knowledgeable about the ways that you can decrease your IHT liability or possibly avoid it all together. Two methods in particular are quite common. One is the annual gift allowance and the other is a tax-free marriage gift presented to a bride and groom by their parents and/or grandparents. For married couples, there are several specific issues to keep in mind when planning for taxes. Husbands and wives can take advantage of two nil rate inheritance tax bands in order to save a sizable amount of taxes. Joint ownership of their home and other real property is another issue for married couples to consider.
Another way to reduce taxes payable after death is to use a deed of variation, sometimes also called a deed of family arrangement. The deed of variation is especially beneficial if all of the assets are passing to a surviving spouse. In those instances, the deed of variation will reduce the amount of inheritance tax the surviving spouse must pay. Surviving spouses have the ability to reallocate those assets in a more tax-efficient manner within the time limit of two years after the death of their spouse.
The long and the short of this is that you really should take advice from a specialist IHT solicitor if you want your family assets to be preserved and to pass to your loved ones without being chewed up by the Chancellor of the Exchequer who would, given half a chance, take the lot.