FBW Financial Planning: Inheritance Tax Planning

Inheritance Tax (IHT) is the tax that is paid on your 'estate'. Broadly speaking this is everything you own at the time of your death, less what you owe. It's also sometimes payable on assets you may have given away during your lifetime. Assets include things like your home and car, possessions e.g. furniture and personal effects, savings and investments, and the proceeds of your life insurance policies, unless they are written in trust.

The surge in house prices in recent years has meant that an increasing number of individuals might now be liable for Inheritance Tax. In the event of your death assets in excess of £325,000.00* could be liable to the tax, which is payable at the rate of 40% for every one. Inheritance Tax is paid by those who inherit, and is deducted from the estate on death.

* This is the Nil Rate Band for tax year 2011/2012.

However with good financial advice and fore planning, there are a number of ways through which we can guide you to reduce your Inheritance Tax liability, such as: -

Using trusts
Ensuring you have a suitable will in place
Making use of all the available allowances and exemptions
Gifting assets
Using IHT efficient investments