Inheritance Tax  Buckinghamshire, Berkshire & Oxfordshire

Making a will is essential if you want to ensure your money and other assets go where you intend them to after you die. A Will can also help ensure that your family does not pay more inheritance tax than they need to. 

Will Inheritance Tax Effect You?

If you are single and have assets over the value of the nil rate band, which is currently £312,000 your estate will have to pay inheritance tax at a rate of 40%. The 40% will apply to the total assets above £312,000. As an example if your total assets were £700,000 your estate would have to pay £160,000 in inheritance tax when you die.

If you are part of a married couple and are the first partner to die you can pass everything your own to your spouse regardless of the amount as a special exemption call "the Spousal Exemption" applies.  The same exemption also applies if you are part of a civil partnership.

Changes made by the Chancellor to the inheritance tax system  in October 2007 mean that if you utilise spousal exemption you no longer loose the right to use your personal nil rate band allowance, thus giving the second spouse an effective tax free amount of £600,000 that can be passed on after second death.

If you are an unmarried couple or cohabiting your partner will have no automatic rights to inherit your assets or property if you do not have a valid will in place. Unlike married couples and civil partnerships no spousal exemption exists in these circumstance and before you can inherit your partners assets which might include the family home you could have to pay a large inheritance tax bill. This may mean you need to sell the family home to pay this bill.

Regardless of your circumstances you should consider your inheritance tax position, people at most risk from inheritance tax issues include married couples with assets over £600,000, single people with assets over £312,000 and cohabiting couples with assets over £312,000.

To work out how much your total assets are worth add up the value of any property you own, any life insurance you have, the value of stocks and shares, the value of savings you hold and add in a value for any other major assets held in the Uk or abroad.  Then deduct any liabilities you may have like outstanding mortgages.

When we work this figure out for many clients they are amazed at the value of their estate but more shocked when they realise that 40% of everything above the applicable nil rate band will have to be paid in tax.

Even if you fall below the inheritance tax threshold you should still consider protecting your assets from the effect long term care requirements could have on the value of your estate, for more information on this area please see our Mitigating the Impact of Long Term Care Costs Page.

Whatever your inheritance tax position we can help you calculate your liability and devise and implement a strategy to help mitigate and plan for the bill, thus ensuring you leave as much money to the ones your love as possible.

For help and advice please telephone us.