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About inheritance planning

Shelter your assets from unnecessary tax

If all your assets – including your home – are worth £325,000 or over, you could be caught out by this tax. Inheritance tax is not only for the super-wealthy so it pays to plan carefully, and stop the taxman taking too much from your estate.

Inheritance tax (or IHT) is charged when you die, based on the value of your assets above the IHT threshold. These assets are known as your estate and can include:

  • Property - your main home and any holiday homes – including homes overseas
  • Investments - such as cash in your bank account, stocks and shares and any other investments
  • Life insurance - the payout under any life assurance plans not written under trust
  • Other valuables - including jewellery and cars

When the tax is payable

If you are single and your estate is valued below £325,000, then there is no Inheritance Tax to pay. If the value of your estate goes over the £325,000 limit, then Inheritance Tax has to be paid at 40% of the extra value only.

The value of your estate can include assets that you have transferred or gifted during the previous fourteen years.

Take steps to reduce your inheritance tax liability

There are a few things you can do to keep your inheritance tax liability as low as possible.

Make a will

This is the first step in making effective plans, whilst making a will on its own does not reduce inheritance tax a will makes sure your assets go to the people you choose quickly and with minimum effort. It also helps you to identify areas where you could take other action.

Make gifts during your lifetime

Some gifts are free from inheritance tax. Making these tax-exempt gifts every year can help cut your inheritance tax bill.

Use life cover to pay the tax bill

When a life insurance policy is written under trust for a named beneficiary, it doesn’t become part of your estate for inheritance tax purposes. Your dependants can use the benefits from such a life insurance plan to pay the inheritance tax bill.

Get financial advice

If you are still unsure and would like to learn more about our Financial Advice Service and how we can help with your overall financial planning

Did you know?

How much is your estate worth?

Your home is probably your single most valuable asset. But what else do you own?

Some of your other assets could be taken into account by HM Revenue and Customs. These include your car, life assurance policies that haven’t been written under trust, bank and building society deposits, and other investments such as stocks and shares.

Get financial advice

If you are still unsure and would like to learn more about our Financial Advice Service and how we can help with your overall financial planning

Some gifts you make during your lifetime are exempt from inheritance tax. We've included the main exemptions here. If you make a transfer to your spouse, this will always be exempt as long as they have a permanent UK home.

If you are still unsure and would like to learn more about our Financial Advice Service and how we can help with your overall financial planning

Annual exemption Up to £3,000 in a tax year. If you give less than £3,000 in one year, you can carry the balance forward to the next year.
Small gifts exemption Gifts up to a total of £250 to each person in any tax year.
Marriage or civil partnership gifts You can give each of your children up to £5,000, each grandchild up to £2,500 and any other relative or friend up to £1,000.
Normal expenditure out of income - gifts If you can make gifts from surplus income, these could be exempt from IHT. You need to establish a repetitive pattern of gifting and leave yourself enough income to maintain your standard of living.
Gifts for the maintenance of the family This includes gifts to a current or former spouse or civil partner – and gifts for the maintenance, education or training of your child.
Gifts to certain institutions Includes UK charities, certain political parties, national museum, universities, the National Trust and some other organisations.

Get financial advice

If you are still unsure and would like to learn more about our Financial Advice Service and how we can help with your overall financial planning

Get in Touch

Our fully qualified advisors are here to help, an initial consultation is free. To take advantage of the full service you will pay for our services on the basis of, an adviser charge, fee, commission or a combination.

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