Inheritance Tax (IHT)
Assets that are held in Trust will not form part of the taxable estate of your beneficiaries. This means that assets held in the Trust for the benefit of your (for example) son or daughter will not be taxed on their death potentially saving your grandchildren tens of thousands in Inheritance Tax (IHT). Your grandchildren could inherit your Trust directly and not from the estate of their parents.
Inheritance Tax (IHT) is a tax on money or possessions you leave behind when you die, and on some gifts you make during your lifetime.
Inheritance Tax (IHT) is charged at 40% on the value of your estate in excess of the nil rate band (£325,000).
All lifetime transfers made during 7 years prior to death will be taken into account. Also, all transfers into a Trust are Potentially Exempt Transfers (PETs) unless the settlor retains an interest in the Trust.
However, a certain amount can be passed on tax-free, this is sometimes known as the 'Nil Rate Band'.
Nil Rate Band
The first £325,000 of your estate is exempt from Inheritance Tax (IHT). Inheritance Tax (IHT) will be payable if your estate exceeds this amount after taking account of any cumulative chargeable transfers you have made in the seven years before your death and any transferable nil rate band from your spouse or civil partner. In the event of your death Inheritance Tax (IHT) is chargeable at a rate of 40%. See Inheritance Tax & Married Couples for a useful way for saving Inheritance Tax (IHT) for couples, using the Nil Rate Band.
From < gov.co.uk
All people in the 2015-2016 tax year has a tax-free Inheritance Tax (IHT) allowance of £325,000. The allowance has remained the same since 2010-11, and will stay that way until at least 2017.
Our trained consultants can discuss your current circumstances and recommend the products that will provide the correct protection for you, your family and your assets. For peace of mind contact The Will Associates today by calling us on 0800 9500 700 to arrange a free appointment with one of our trained consultants, at a time convenient to you and your family in the comfort of your own home.