Inheritance Tax

Inheritance Tax is paid if a person’s estate (their property, money and possessions) is worth more than the Inheritance Tax threshold when they die.

The current threshold above which your estate must pay 40% tax is currently £325,000 (frozen until April 2021) for a single person. For people who are married or in a civil partnership (or widowed since 9 October 2007), the maximum combined threshold for Inheritance Tax is £650,000. So, in the worst case situation, if your estate (everything you owned at the time of death, including your house value) was, say, £425,000 then you would have a taxable estate of £100,000. This would give rise to a tax bill of £40,000. So, £40,000 less going to your loved ones.

The rules involved in Inheritance Tax are complex and for this reason alone it is important to discuss your situation with us. Only then will you be able to understand its potential effects on you, whether your loved ones will lose out on some of their inheritance and, more importantly, what can be done through us to reduce or even eliminate its effects. Note that a new IHT main residence nil-rate band applies from 6 April 2017, starting at £100,000 per person and rising annually in stages to £175,000 from 6 April 2020; detailed conditions apply.

The calculator below can help give you an estimate of your Inheritance Tax (IHT) liability. 

Link to calculator

INHERITANCE TAX PLANNING, WILL WRITING, TRUSTS AND TAXATION ARE NOT REGULATED BY THE FINANCIAL CONDUCT AUTHORITY.

Contact us today:    0131 665 7533    michael@ifa-lothians.com