Inheritance Tax
Inheritance Tax Planning Guide
How Can We Help?
Whatever your age, or the size of your potential estate, Hawsons can advise tax efficient mitigation strategies to reduce your Inheritance Tax (IHT) exposure, through lifetime transfers of assets, tax efficient structuring of wills, and utilisation of tax reliefs on passing.
Business owners are able to optimise their estate distributions through various forms of reliefs on passing. Notably, potential entitlement to Business Property Relief and Agricultural Property Relief. If you are a company owner or are considering incorporating your business, it is important you discuss the structuring of your business with a tax professional to leverage the available reliefs.
For more complex situations the use of a trust as an IHT shelter may be appropriate to your circumstances, and we can provide tax advice on setting up a trust as well as dealing with the ongoing trust accounting and tax administration.
Estate Planning and Inheritance Tax - Top 10 Tips
- If the value of your assets less your liabilities equals less than the Inheritance Tax Nil Rate Band (currently £325,000) you should not have an Inheritance Tax liability on your death.
- Make a will
- If you die without a will the laws of intestacy will apply to your estate and your assets may not go to the people that you had wished them to.
- If you and your partner are unmarried/not in a civil partnership there is no automatic right on death for your assets to be inherited by your other half.
- Review your will regularly. Legislation will change over time along with your personal circumstances and your will may be out of date.
- Use your lifetime exemptions
- Annual Exemption (£3000 per donor per year)
- Small Gifts Exemption (£250 per donee per year)
- Gifts in consideration of marriage or civil partnership (£5,000 to a child, £2,500 to a grandchild or great-grandchild, or £1,000 to any other person)
- Normal Expenditure out of Income does not attract an Inheritance Tax charge.
- Must be habitual
- Must be able to prove that the gift was made out of surplus income and that after the gift the transferor was left with sufficient income to maintain their usual standard of living
- Gifts made during lifetime to an individual are not immediately chargeable. Provided the donor survives the gift by seven years the value will be removed from his/her estate.
- You cannot give an asset away in an attempt to reduce your Inheritance Tax liability and continue to benefit from the asset.
- Trusts can be a useful Inheritance Tax planning tool and may protect your assets in the future should you need to pay nursing home fees or if there is a divorce in the family.
Benefits of working with Hawsons
Take time to get to know you, your business and your aims
Partner-led service tailored to your specific needs
Responsive and available when needed
Tax planning and advice
A one stop shop of specialist services available as needed
Efficient and effective use of technology
No unexpected bills
Meet our team
Meet our team
Why Choose Hawsons?
Our National and International Reach
We are a member of HLB International a fast-growing, dynamic network of independent accounting firms and business advisers. Our membership gives us access to accountancy firms in over 150 countries worldwide to ensure consistent, cost-effective and expert advice to our clients and businesses with international operations and needs.
In the UK, HLB participant firms have a strong presence and work closely together to deliver best practice service and latest thought leadership through a number of working parties that meet regularly. Regular contact with these firms enables us to provide a national service if required.
