Inheritance Tax Mitigation

Limiting inheritance tax liability isn’t just the preserve of Britain’s wealthiest families – with inheritance tax thresholds sitting at just £325,000 per person, many people are surprised at just how little you can leave to the next generation.

Planning your estate properly and in a timely manner can reduce the amount your family need to pay in inheritance tax, ensure that the family home stays in the family, and reduces the amount of time your will is held in probate (which can be an incredibly lengthy process). The loss of a loved one is always a stressful time, so preparation is key to ensuring that your family’s difficulty is not compounded by financial pressures and unexpected complications.

Estate Planning

Estate planning includes a number of stages, including making the most of allowances and reliefs, reducing the estate through charitable giving and gifting, and paying the liability efficiently. One of the most effective ways to keep properties, businesses, and more liquid assets within the family is putting them into a trust.

Gifting and charitable giving are two effective ways of reducing inheritance tax liabilities, but unfortunately the options are limited. Gifts must be given at least seven years before inheritance taxes come into effect, which does not help your family in case of sudden illness or accident. Likewise, charitable giving can reduce the amount that you pay on your existing estate (36% inheritance tax, rather than 40%) but only has a limited effect and will ultimately reduce the size of inheritance available.

In cases where the estate exceeds the allowed £325,000 by a large margin, trusts are the most effective way to reduce tax liabilities. Getting advice now to put your estate in order can have immediate benefits, as well as giving you peace of mind for the future. Get in touch to discuss your inheritance tax liabilities and see what we can do to reduce them.