What is Estate Planning?
Estate planning is a way to ensure that you can provide for your loved ones in the future by passing on your wealth and assets. The process can vary in complexity depending on the individual circumstances of a person’s assets and health.
Estate Planning and Inheritance Tax
Normally, you will not have to pay inheritance tax on your estate if you leave everything to your spouse or a charity or if your estate is below £325,000. This threshold increases to £475,000 if you choose to give away your estate to either your children or grandchildren.
The most important thing to note is that the inheritance tax rate is 40% on anything above the threshold. So if your estate was valued at £330,000 and your threshold was £325,000, then the 40% inheritance tax would only be charged on the £5,000, which would account to £2,000.
If you leave your estate to your spouse or civil partner then they are exempt from paying inheritance tax. As well as this, your spouse’s allowance increases by the proportion of your allowance that you did not use. What this means is that a married couple can leave up to £950,000 of their estate without having to pay inheritance tax.
There are also certain job roles that are exempt from paying inheritance tax if the person was to die in active service or if an injury suffered in active service caused an early death. These job roles include the police, paramedics, firefighters, members of the armed forces and aid workers.
The executors of the Will have the responsibility of acquiring the assets and issuing them suitably to pay inheritance tax to HM Revenue and Customs. If there is no Will then this will be the job of the administrators. This can be a stressful responsibility at times, as the executor and administrator ensure that the wishes of the deceased are carried out. Our estate planning solicitors at Keoghs are able to guide you through the process and, if required, can highlight your exact duties during this time.
Why Keoghs Solicitors?
We focus on innovative solutions to ensure it suits your requirements and needs in the most tax-efficient format. As well as this, the possible effects of Capital Gains Tax and Inheritance Tax are taken into consideration.
There may be many avenues advisable for your needs and our Senior Partner Michael Sandler has a wealth of knowledge, having practiced within this specialism for over 40 years, which makes him one of the region’s most respected experts in this area of law.
Please contact our team at Keoghs, Nicholls, Lindsell and Harris LLP today and one of our friendly experts will be happy to help. For information on our costs of Wills, Lasting Powers of Attorney and Advance Decisions, please click here.