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Inheritance Tax (IHT) is the tax charged on the value of property passing on a person's death and on certain lifetime gifts subject to particular exemptions and relief's.
The Inheritance Tax rate is currently 40% and is charged on the value of estates falling above the nil rate band (currently £275,000). The value of an estate is basically the net value of everything you own i.e. all assets minus any debts.
Inheritance Tax is no longer just a concern of the wealthy; with the massive increases in house prices in recent years it is becoming a growing concern for many people. That said, it is not cause for too much alarm as there are a number of things that can be done during your lifetime and in your will in order to ensure that you pass on as much of your wealth as possible to your loved ones and not to the Inland Revenue.
Such planning could range from simple matters such as changing the "Joint Tenancy" on a couple's principle private residence to a "Tenants in Common" to more complex matters such as the setting up of Trusts in order to reduce other tax liabilities and to make gifts conditional or protected.
Inheritance Tax Planning should not be put to one side, Bowker Orford believe that this should be reviewed at regular intervals to ensure that all that can be done to mitigate Inheritance Tax is done and that the wishes for the distribution of your estate on death are met.
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