Despite what the Government say more and more families are paying Inheritance Tax year on year. Here are our top tips for ensuring that you mitigate any liability:
- 1. Write a will
Writing a will is most important step in any estate planning. This document set out your wishes for your assets after death. If there is no will the law will effectively decide what happens to your estate.
It is important that any will put in place is drafted correctly. Particular care needs to be taken over wills for those who are not married but have children, and who have considerable assets.
- 2. Calculating the potential IHT liability
Before any planning is undertaken you should calculate the extent of any inheritance tax liability. Each individual has a tax-free allowance of £325,000, known as the nil-rate band. IHT only applies to the value of the estate above this at death, at a rate of 40%.