Tax Tips with AWM: IHT

Tax-Year-End (5 APRIL) is approaching FAST and its time to take full advantage of all those tax benefits and allowances, that not many people utilise.

This is Tip #4 of the blog series with the main topic of Pre-Tax-Year-End tax planning. If you missed Tip #1,#2 and #3 on Venture Capital Trusts and Enterprise Investment Schemes and How to maximise your allowances, head over to our blog page. 

The tax tips are to help make sure that you best utilise your Tax-Year-End options and today we focus on Inheritance Tax

What is Inheritance Tax (IHT)?

Inheritance Tax (IHT) is a tax on the estate (the property, money and possessions) of someone who has passed away.

How much IHT will I pay?

The current rate of IHT is 40%, each individual has a basic nil rate band of £325,000. There are various scenarios where this may not hold true, you may have an additional nil-rate band from either your late spouse or passing your main residence to a direct decedents. You may also have a reduced nil-rate band from gifts made throughout your lifetime.

We are experts in this field so click below for one of our advisers to give you an estate appraisal.

Residence Nil Rate Band (RNRB)

The Residence Nil Rate Band (RNRB) – also known as the home allowance -has been introduced recently. Provided certain conditions are met, the home allowance gives you an additional allowance to be used to reduce any IHT liability against your home.

The RNRB allowance is currently £150,000, but it will rise to reach £175,000 in 2020/21.

IHT Gifts, Reliefs & Exemptions

Some gifts and assets are exempt from IHT, such as wedding gifts and charitable donations. Relief might also be available on certain types of property such as farms and business assets.

You can gift up to a value of £3,000 each tax year,  click below to find out more on how we can help you optimise your gifting allowance.

*utilising these allowances are provider timeline dependent.

Ascot Wealth Management Limited is authorised and regulated by the Financial Conduct Authority reference 551744. Our registered office: Scotch Corner, London Road, Sunningdale, Ascot, Berkshire, SL5 0ER. Registered in England No. 7428363. www.ascotwm.com Unless otherwise stated, the information in this document was valid on 3rd February 2017. Not all the services and investments described are regulated by the Financial Conduct Authority (FCA). Tax, trust and company administration services are not authorised and regulated by the Financial Conduct Authority. The services described may not be suitable for all and you should seek appropriate advice. This document is not intended as an offer or solicitation for the purpose or sale of any financial instrument by Ascot Wealth Management Limited. The information and opinions expressed herein are considered valid at publication, but are subject to change without notice and their accuracy and completeness cannot be guaranteed. No part of this document may be reproduced in any manner without prior permission. © 2017 Ascot Wealth Management Ltd. Please note: This website uses cookies. To continue to use this website, you are giving consent to cookies being used.