After you die your estate is counted up, debts and funeral expenses taken off, and depending on how much is left, Inheritance Tax may be due.
Currently the Inheritance Tax threshold is £325,000 – this means that anything above this amount is taxed at 40%, or 36% if 10% of your estate is left to charity. But there are things that you can do to reduce the amount of tax payable on your death. Here are a few suggestions.
Give a Gift to Family and Friends
If you were planning on leaving something to family or friends you may wish to consider doing this before you die. If you give a gift to someone, and you live for another seven years, the gift won’t be counted as part of your estate.
We each have a £3,000 annual exemption every tax year; you can give this amount away inheritance tax free.
Donate to Charity
Anything you leave to charity is free of Inheritance Tax so you can benefit a good cause whilst cutting down the tax bill. And by leaving at least 10% of your estate to charity you cut the Inheritance Tax bill. The taxman can only claim 36% rather than 40%.
Death is never something we really want to think about but it’s important to make sure that you have considered the impact it will have on your family and your Will is professionally written. Too few people sit down with a lawyer for advice and to discuss what they want to happen to their assets after they’re gone. By failing to take this advice you risk giving a much larger slice of your wealth to HM Revenue and Customs rather than it going to the family and friends that you love.
For professional Will Writing and Inheritance Tax services our expert team of Inheritance and Welfare Solicitors at Slater and Gordon UK can help. Call us on freephone 0800 916 9056 or contact us online and we will call you.