Written by Ray Coman
Inheritance tax is politically sensitive. Historically, the laws in this area have been revised frequently. To assess the impact of any updates to the legislation, it is worth reviewing estate arrangements regularly. The contents of this section can assist with an assessment of a person's exposure to inheritance tax and options for tax mitigation. From the outset, it should be emphasised that while tax planning can help direct more wealth towards loved ones, this is typically at the expense of relinquishing ownership and control over the estate.
When a person dies the usual procedure is for their property to be valued by a solicitor. The total of all of the person's possessions is referred to as the estate, and the value placed on this estate is known as probate value. Most UK taxpayers are entitled to an allowance (which is £325,000 for 2013/14.) In broad terms the value of the estate over the allowance (or nil rate band) is liable to inheritance tax at 40%.
With the inheritance tax nil rate band frozen at £325,000 from 6 April 2009 to 5 April 2015, increasing numbers of estates are within the charge to tax. Consequently, a growing number of families are facing the dim prospect of being forced to sell their family home to pay for death duties.
The following section includes guidance on: lifetime inheritance tax, inheritance tax on death, exemptions from inheritance tax, tax planning arrangements, business property relief and domicile.
Although inheritance tax is normally the remit if a solicitor, it is a common consideration when planning your financial arrangements. Please let us know if this is an area where you consider Coman & Co can be of assistance.