Death and taxes, so it is said, are the two inevitabilities in life. It is an unfortunate reality that for many people, the two go hand in hand.
Traditionally Inheritance Tax was a tax on the wealthiest people in society. In recent years house prices have soared and general wealth has increased. However, the tax free allowance for individuals has not and a vast number of people now find their Estate faced with a large Inheritance Tax bill on death.
The Government has gone some way to rectifying this situation stating in October 2007 that married couples and civil partners will be able, in effect, to double their individual tax free allowance on the death of the survivor. They have not, contrary to media reports and general perception, doubled the tax free allowance for an individual. This is currently £325,000.
If you are an individual or an unmarried couple with assets over the tax free allowance your Estate could pay 40% tax on the value of your Estate above this figure.
The decline of the Nil Rate Band Discretionary Trust
Prior to the 2008 Finance Act many people created Discretionary Trusts in their Wills to mitigate Inheritance Tax liability. The effect of the changes in law is that these Trusts are now, in some circumstances, no longer required and could put the family in a worse financial position.
If you have made a Will to take advantage of the Nil Rate Band Discretionary Trust you should seek advice as to whether it is still appropriate for your circumstances.
We are happy to talk through the options with you.
Inheritance Tax Frequently Asked Questions
- If I leave all my assets to my spouse or civil partner upon my death, will they have to pay Inheritance Tax if the value is greater than the Nil-Rate Band?
- What is Inheritance Tax?
- What is the Nil-Rate Band?
- Are there any other gifts which do not attract Inheritance Tax?
Fosters Solicitors team of Wills & Probate lawyers have a wealth of experience and knowledge to assist you in relation to any legal query or matter you may have. Call us on 01603 620508 or complete our online enquiry form and a member of the department will be in touch very soon.
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