We will establish your IHT liability and provide recommendations to mitigate the tax. As Chartered Financial Planners we have a cautious approach and use approved schemes that do not exploit the greyer areas of tax law.
For those who are unsure what they will pay, Inheritance Tax is calculated as follows:
Single or divorced: 40% of your estate over £325,000
Married, in a civil partnership or widowed: Up to £650,000
The IHT allowance is set to be held until the end of 2029/30 Tax Year
If you own your own home (or a share in it), the tax-free threshold can increase from £325,000 to £500,000 in certain instances
What about the IHT rules on main residences?
There is no Inheritance Tax payable if you pass your home to your spouse or civil partner when you die, however if you leave your home to another person it counts towards the value of your estate.
If you leave your home to your children or grandchildren, the tax-free threshold can increase to £500,000, if your estate is worth less than £2 million.
Getting it right
IHT planning has many subtleties to consider and we offer highly qualified Chartered Planners, with the expertise to bring confidence to your long term planning. Where appropriate we will work closely with your existing professional advisers to find the most beneficial solution for you.
Top 5 Tips for Saving Inheritance Tax
Annual exemptions and reliefs You can take advantage of the annual exemptions and reliefs available. These include the annual allowance of £3,000, the small gifts allowance of £250, gifts in consideration of marriage and gifts to charities.
Making direct gifts Gifts can be made direct to beneficiaries. Whilst this will potentially (after seven years) reduce your estate for tax purposes, you will no longer have access to these monies.
Making gifts into Trust There are numerous types of Trusts available and may include the ability to retain some access to either income or capital should this be required in the future.
Investing in Qualifying Shares e.g. Alternative Investment Market (AIM) There are qualifying investments for tax planning, such as AIM shares. Certain shares qualify for Business Property Relief (BPR) and these would benefit from full relief* against Inheritance Tax when held for a period of two years. *From April 2026, 50% relief resulting in 20% Inheritance Tax rate.
Gifts out of Surplus Income It is possible to make gifts out of surplus income. There are various criteria for assessing the exemption and it is important that the gifts are made out of taxable income and that the gifts do not affect your normal standard of living.
Contact Boolers today if you are looking for inheritance tax planning advice. Our financial advisers in Leicester will establish your IHT liability and advise you based on your needs and the current tax rules, to help reduce your IHT liabilities.
