Your beneficiaries may be responsible for paying inheritance tax if the total value of your estate and all of your possessions exceeds a certain threshold. You can give your beneficiaries up to £325,000 tax-free to the IHT nil-rate band. Anything exceeding that will be taxed, frequently at a rate of 40%.
Who is subject to estate tax?
The executor of your will is in charge of organizing the tax payment. If you don't have a will, the executor of your estate will take care of this. Taxes are paid with cash from the made by selling estate assets. After the inheritance tax has been paid, the remaining assets of the estate are distributed. Although the process of transferring assets from an estate, known as probate, occasionally takes longer than six months, IHT must be paid within that time frame.
How much can I afford to buy or give?
The majority of people who make inheritance tax planning advice spend and make donations, but some people hold back because they fear they won't have enough in the future. Using cash flow modelling, we can show you how much money you'll need to keep up your current way of life while taking into account future needs like the cost of long-term care. As a result, thorough financial planning typically incorporates estate planning in a substantial way.
Estate planning involves more than just setting aside money for your loved ones after your passing; it also involves enjoying a comfortable life now. For this reason, starting your planning early is essential, and our lasting power of attorney online can work with you to manage or reduce an inheritance tax burden, giving you advice on the best ways to transfer assets and help you figure out how much money you'll need.
Transfer your assets carefully
Many people want to keep some control when they relocate their belongings. They might want to make sure that their money stays in the family, or they might have a specific goal in mind, like paying for school costs or a down payment on a house. We could provide you choices to make sure your money you want it to and for the things you want it to. Because they are often not included in the computation of your inheritance tax liabilities, pensions might be crucial in estate planning. If you can afford to leave your pension alone while utilizing other assets to pay for your retirement, you might be able to move it on tax-free while gradually lowering the size of your taxable estate.
