How to minimise Inheritance Tax
Inheritance Tax (IHT) is widely regarded as one of the most hated of taxes. However with the help of a specialised estate planning law firm, like Goldsmith Williams Solicitors, you may be able to mitigate your inheritance tax liability.
There had been high hopes and expectations that the inheritance tax threshold (called the nil rate band) would increase after George Osborne promised exactly that in 2007. However, the £1 million threshold now appears a long way away following the Chancellor’s announcement that it will be frozen at £325,000 until 2019.
On initial inspection a freeze may appear sufficient, however, when you take into account rising house prices more and more estates will fall on the wrong side of IHT.
Opponents of inheritance tax have revealed if house prices were increase by 2 per cent, the average homeowner in the South East, East Anglia, South West and West Midlands would find their property alone surpassing the IHT threshold.
Currently the average house in Greater London is worth £487,000; £162,000 is subject to 40% tax, leaving a possible charge of £64,800 to IHT.
However there are several ways which you may be able to minimise your inheritance tax liability including:
- Gifts made during your lifetime
- Transfer of assets
- Trusts (e.g. Discretionary trusts , Life Policy trusts and Business Trusts)
- Charity donations
- Relief schemes.
The key however is to plan early; leave it too late and you can lose many of these viable options. Speak to one of our estate planning team for more information about estate planning and inheritance tax mitigation.
Content correct at time of publication