How much inheritance tax you pay is mainly based on the value of your estate after allowances are deducted. Whilst allowances have increased this year on property left by parents and grandparents, it may be the case you still have to pay 40% inheritance tax on the wealth you hoped to leave your loved ones.
An additional allowance for family homes has been introduced on top of the existing tax-free band, taking the total to £1million. However, the wealthiest estates will not qualify for the additional relief, which will be tapered away for estates valued at between £2 million and £2.35 million.
Although this increase is good news, it is important you do not assume your assets are exempt from inheritance tax.
It may be the case that you decide to set up a trust to pass on some of your wealth in a tax efficient manner. This is a practical way of making a gift to the next generation, whilst ensuring your capital is protected
Our expert tax planning team are able to work with you to ensure the correct measures are in place, meaning that you do not have to pay more inheritance tax than necessary.
Contact us to find out how we can help.