Inheritance Tax Planning
Our dedicated Inheritance Tax Solicitors are experts in the field, and will be on your side and by your side to ensure that you receive straightforward and effective legal advice, suited to your needs.
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Our Inheritance Tax Solicitors are specialists in their field, and you can explore your best options by consulting them and allowing them to guide you through the process carefully and efficiently.
If you have significant assets, particularly business or overseas assets, you’ll want to ensure your wealth passes on to the next generation without incurring unnecessary Inheritance Tax charges.
The first £325,000 of your estate’s value—known as the ‘nil rate band’—can be passed on tax-free. If you own your home, the allowance you can pass on Inheritance tax-free increases by £175,000 or a total of £500,000 (fixed until 2026). Anything over and above that will be liable to 40% Inheritance Tax. Exemptions include anything you leave to your spouse or civil partner and specific property and business reliefs.
It’s essential to take the time now to arrange your financial affairs; this includes using any reliefs or allowances to maximum advantage and managing your wealth using trusts and Inheritance Tax planning tools such as lifetime gifts, potentially exempt transfers (PETs) and trusts. Doing so can help you leave a lasting legacy, protecting future generations.
We specialise in giving Inheritance Tax planning advice to individuals subject to Inheritance Tax, such as high-net-worth individuals, entrepreneurs and property investors. With Rowlinsons’ Inheritance Tax solicitors, you get expert legal advice so you can effectively plan your Inheritance Tax.
We can provide clear, direct advice on issues including:
Our Inheritance Tax lawyers have many years of experience helping individuals and their families across England and Wales plan for their passing or that of a loved one. Our expertise in this area has gained us the Excellence in Private Client Award from the National Law Society in 2018. Rowlinsons Solicitors also received Highly Commended in the Boutique Private Client Team of the Year category at the British Wills and Probate Awards 2023.
Our team includes some of the most prominent and renowned Wills, Trusts and Estate Planning Solicitors in Cheshire and members of the Society of Trust and Estate Practitioners, further reflecting our technical know-how and expertise in this specialist area of law.
The amount of Inheritance Tax chargeable on your assets and property after you pass away can significantly impact the value of the assets your loved ones inherit. It is crucial to understand the rules around Inheritance Tax so you can potentially mitigate this.
Efficient planning reduces your Inheritance Tax liability when you pass away, so more goes to your beneficiaries and less to the tax man.
Inheritance Tax law is a dynamic area of law, and the rules can change, so it’s vital to have a plan and ensure it’s up to date.
To make an appointment please call 01928 735 333 or click here for a call back.
Inheritance Tax is generally a 40% tax on any asset within an estate valued over the inheritance tax threshold of £325,000.
It only applies to the amount over the limit, so an estate valued at £400,000 would pay 40% on the £75,000 that goes over the threshold.
This limit, known as the “Nil Rate Band”, can be affected by a number of factors, and estates below the Nil Rate Band are not liable for Inheritance Tax.
You may also leave any asset over the Nil Rate Band to a spouse, civil partner, or charity, which would also negate any Inheritance Tax costs.
You can give away assets during your lifetime, but if you try to dispose of assets to exclude them from your estate for Inheritance Tax, you may still be liable for Inheritance Tax (this includes lifetime gifts over £3,000). Rules on lifetime gifts are complicated, so you should seek expert legal and financial advice.
Rowlinsons can help you understand your options to effectively manage your wealth to benefit future generations without being charged more than necessary.
There are many options to consider when minimising the Inheritance Tax chargeable to your estate to maximise the inheritance you pass on. More commonly, there are exemptions on the 40% tax over £325,000 for gifts to spouses and charities, and relief schemes are available for business owners and agricultural land owners.
These strategies are complex, which is why it’s essential to speak to an expert. Rowlinsons solicitors can provide clear, beneficial advice on Inheritance Tax planning to help you understand your options and show you the steps you can take so you can leave more behind for your loved ones.
While most assets over your Nil Rate Band Allowance will be considered when calculating the Inheritance Tax on your estate, there are some common exemptions, such as:
You may also benefit from business and agricultural property relief. This could make 50% or 100% of the business or agricultural assets exempt from IHT: the amount of relief will depend on how long the deceased had owned the business, asset, or shares, and how the business is structured at the time of death. Our Inheritance Tax Solicitors can help you plan ahead to ensure your tax liability is minimised.
Capital Gains Tax (CGT) on inheritance is generally paid from the estate before any money, property, or asset is distributed, so beneficiaries do not need to pay it.
The executor or administrator of the estate will be in charge of calculating and paying any outstanding tax balance on the estate before transferring assets. CGT will apply in situations in which:
With expert, tax efficient financial planning, Rowlinsons Solicitors can help you reduce your IHT bill. Contact our Inheritance Tax Specialists today to find out how we can help you.
The 7-Year rule in Inheritance Tax is a principle that makes gifts made over 7 years before the death of the testator exempt from tax. Gifts made less than 7 years before the death will be considered in the valuation of the estate, and will affect the Nil Band Rate.
The rate of tax paid on gifted assets before death is variable, going from 0% for gifts made over 7 years before death to 40% if the gift was made less than 3 years before.
If you have left your main property of residence to children or grandchildren, your allowance may increase by £175,000. Additionally, you may use your late civil partner’s or spouse’s allowance if they did not use it at the time of their passing, meaning your tax-free allowance may grow close to £1M in specific circumstances.
On the other hand, Potentially Exempt Transfers (PET) made in the 7 years prior to death could reduce the Nil Band Rate. These are gifts of unlimited amount, and become exempt from Inheritance Tax if the person gifting the asset survives for more than 7 years after the transfer.
If your estate is liable for Inheritance Tax, the taxable amount must be paid within 6 months from the death, and proof of payment must be submitted to the Probate Registry. Only once the balance is paid a Grant of Representation, or Probate, can be issued.
The value of large estates can make the Inheritance Tax bill a significant expense, even with the additional relief of Residence Nil Rate Band, business and agricultural property relief, and Transferable Nil Rate Band for widows and widowers. If the representative for the estate or family members of the deceased have issues paying for the whole balance within 6 months, they may:
The testator can set up an insurance policy while they are still alive to cover the cost of IHT, however this should be done with the support of specialist succession planning advisors.
With careful planning using different options, you can reduce the value of your estate that will be liable for tax while ensuring your beneficiaries can benefit from your wealth. Options include:
One of the most obvious ways of reducing your estate for Inheritance Tax purposes is to make lifetime gifts of money, property or other assets. However, there are rules around how much of your estate you can give away tax-free.
If you’re married or in a civil partnership, you may gift your partner any sum you like, provided your partner resides in the UK. To anyone else, you can give a total of £3,000 away annually (known as the annual exemption). You can also give as many smaller gifts of £250 as you like, so long as you haven’t used up your allowance for that person.
Wedding gifts are exempt, with the rules being £5,000 for a child, £3,250 for a grandchild, and £1,000 for anyone else.
Greater gifts over the annual exemption (PETs) may be subject to Inheritance Tax if you die within seven years of making the gift. These will be free from Inheritance Tax if you survive seven years from making the gift.
A trust arrangement is an Inheritance Tax planning tool that allows you to leave part of your estate to a beneficiary or beneficiaries. Instead of gifting your beneficiaries their inheritance while you’re alive, you place the assets into a trust for them to receive later. The benefit is that you have more control over your money than if you simply gave it away. Depending on the trust’s governing rules, this can immediately protect part of your estate from Inheritance Tax.
Several types of trusts can help with Inheritance Tax planning, including gift and loan trusts and discounted gift trusts. Each arrangement has different advantages and disadvantages. All types aim to protect property or financially support children, with trustees overseeing their management.
The trust is typically structured in one of two ways:
You can take out a life insurance premium and put it into a trust so that on your death, the proceeds will be paid directly to your beneficiaries and won’t be included in your estate. This money can help to mitigate any Inheritance Tax due on the estate.
Anything you leave to charity or a political party in your will is excluded from your estate for Inheritance Tax purposes. Therefore, you can support a cause close to your heart while reducing the charge of Inheritance Tax on your estate. You could even set up a charitable trust in your name and leave behind a legacy which helps support a worthy cause.
You can keep your home in the family by handing it over to your children while you’re still alive, but you must be aware that there are rules to stop you from simply gifting your home to avoid Inheritance Tax. You will have to sell your home to them at the current market value and pay them the current market value in rent if you want to remain living there; otherwise, it will be classed as a gift with reservation of benefit and may count in full for Inheritance Tax.
Our friendly and approachable team have years of lifetime planning law experience to help you with Inheritance Tax planning. Our expertise and high reputation within the law industry means we can help deliver results, acting swiftly with accuracy.
You can feel confident that you are receiving a high-quality service where we are on hand to help you, whatever the issue. Our well-regarded Solicitors in Runcorn & Cheshire will work with you to resolve matters and ensure that the future is planned for in a time of rising house prices.
You deserve to receive the best legal expertise, and we provide here at Rowlinsons. Our offices are in Frodsham and Sutton Weaver, and our Wills, Trusts & Estates Solicitors in Runcorn regularly help clients in Warrington, Widnes, St Helens, Chester, Northwich, and North Wales, but we are on hand to help you across England and Wales. Whatever your query, do not hesitate to get in contact today.
To make an appointment please call 01928 735 333 or click here for a call back.
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