Inheritance Tax & Estate Planning
The UK Inheritance tax system is notoriously complex, but the benefits of structuring your estate tax-efficiently can mean more wealth can pass to your beneficiaries. We can help mitigate Inheritance tax (IHT) so your loved ones can make the most of your assets, wealth, and property to secure your financial legacy for future generations.
At Clark Willis, we can work with you on mitigating any Inheritance Tax liability you may have, either on your death or any lifetime gifts, and provide recommendations to reduce the tax payable.
The primary position is Inheritance tax (IHT) is payable at 40% on a person’s assets over £325,000 on death and certain gifts made during their lifetime. There are also additional residential property allowances, transferable allowances between spouses and a rift of exemptions and reliefs.
Estate planning is about more than just Inheritance tax, but the succession of your wealth, your business assets or your farming interests. The structure of your affairs to control who gets what, when and how in accordance with your objectives.
- Inheritance Tax Planning
- Business Succession and IHT Relief
- Agricultural Succession and IHT Relief
- Residential Care fees
Our Private Client team includes members of STEP, the global professional association for practitioners who specialise in family inheritance and succession planning.
How we work
How we work:
- An initial meeting to listen to understand your succession aims, review any planning undertaken to date and explore your estate contents.
- Prepare an Inheritance Tax Report for IHT Planning identifying your current liability and suggesting planning options for you to consider to create your strategy.
- Work with your financial adviser and/or accountants to ensure your estate is wholly tax efficient and structures appropriately.
Business Succession Planning
We can discuss with you agreements to ensure beneficiaries receive the value of a business share whilst the interest remains with the existing owners (Cross Option Agreements) appoint Business Executors to specifically deal with the continuation or sale of a business or consider structures for business succession.
Agricultural Business Planning
With experience assisting large complex estates through to small holders across the Durham Dales and North Yorkshire, our experienced solicitors can assist with the additional considerations for Inheritance tax and succession planning that come within this specific industry.
Farming estates can often be held by different owners, involve trusts and have the family factor to incorporate into succession planning whilst diversification and industry developments can have an impact on taxation affairs. After decades of relative stability, Agricultural Property Relief is being considered alongside all IHT reliefs and reviewing succession planning before any potential changes arise may be prudent.
Frequently Asked Questions
What is the current Inheritance Tax Threshold?
Each person has a current threshold at which inheritance tax (IHT) becomes payable on their estate of £325,000. (This is known as the nil-rate band.)
Current IHT Rate
Inheritance Tax is payable at 40% on deceased estates and 20% on certain lifetime gifts. It is possible to reduce the rate of IHT from 40% to 36% with charitable gifting.
Residential Nil Rate Band (additional property allowance)
Introduced in April 2017, there are also additional residential property allowances available if property is left to a direct descendant, currently £150,000 which rises to £175,000 in 2020/21.
Married Couples - Transferable allowances?
In the case of married couples, a widow can also utilise any unused allowance of a deceased former spouse meaning that potentially, married couples to have an estate up to £1m in the 20/21 tax year before IHT will be payable.