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Talfourds Solicitors - Hornchurch

Inheritance Tax Planning
Probate and Estate Administration



Inheritance Tax "Nothing in this life be certain save death and taxes". Inheritance Tax (IHT) - the tax that arguably combines both halves of Benjamin Franklin's famous dictum.

IHT is essentially a form of death duties - the tax charged on what you leave behind when you die.

Inheritance Tax is the tax that is paid on your 'estate'.  Broadly speaking this is everything you own at the time of your death, less what you owe.  It's also sometimes payable on assets you may have given away during your lifetime.  Assets include things like property, possessions, money and investments

In some ways it's a fee charged by the government for allowing you to leave at least some of your wealth to your heirs.

There are many ways in which to attempt to allieviate what the tax man takes.  Careful planning during your lifetime can provide ways of distributing your wealth to your heirs, without a full tax burdon, but you should take full and qualified advice from solicitors specialising in these laws, to make sure Trusts, Equity schemes and Property portfolios are correctly addressed.

Talfourds Solicitors are fully qualified Inheritance Tax Practitioners

Talfourds Accreditations

Law Society of England & Wales logo Investors in People logo
Family Lawyers logo Association of Personal Injury Lawyers
 

Tel: 01708 511000
 
General Guidance
Commercial, Leasing and Purchase



Lease agreement, Leasing and Purchase
Trusts

You may decide to use a trust to pass assets to beneficiaries, particularly those who aren't immediately able to look after their own affairs.

If you do use a trust to give something away this removes it from your estate, provided you don't use it or get any benefit from it.  But, bear in mind that gifts into trust may be liable to IHT.  Trusts are complicated and it's best to seek specialist professional advice.

Gifting your home to your children

If you want to give your home away to your children while you're still alive, you might want to bear in mind that:
  • gifts to your children - unlike gifts to your spouse or civil partner - aren't exempt from Inheritance Tax unless you live for seven years after making them
  • if your children sell your home, and it is not their main home, they will have to pay Capital Gains Tax on any increase in its value
Equity release

A commercial equity release scheme is a method of using the value of your home to raise money.  This is like having a mortgage on your property but, instead of making monthly repayments, you repay the money when your house is sold.  You can use these schemes to:
  • buy an annuity to give yourself a regular income for life
  • release cash to invest or spend as you want
Before using a commercial equity release scheme you need to get proper advice because there are risks:
  1. the interest rate is fixed at the time you release the money - if the value of your home falls or doesn't grow by enough you could end up with no equity in your home
  2. if you change your mind after taking out the loan you could face substantial penalties
Who pays Inheritance Tax? Estates and lifetime gifts

Not everyone pays Inheritance Tax on death.  It only applies if the taxable value of your estate (including your share of any jointly owned assets and assets held in some types of trusts) when you die is above £312,000 (2008-2009 tax year).  It is only payable on the excess above this nil rate band.

There are also a number of exemptions which allow you to pass on amounts (during your lifetime or in your will) without any Inheritance Tax being due, for example:
  1. if your estate passes to your husband, wife or civil partner and you are both domiciled in the UK there is no Inheritance Tax to pay even if it's above the £312,000 nil rate band
  2. most gifts made more than seven years before your death are exempt (but see the next section on trusts and companies)
  3. certain other gifts, such as wedding gifts and gifts in anticipation of a civil partnership up to £5,000 (depending on the relationship between the giver and the recipient), gifts to charity, and £3,000 given away each year are also exempt
Transfers into trusts and companies

Transfers of assets into most trusts and companies are subject to an immediate Inheritance Tax charge if they exceed the Inheritance Tax nil rate band (taking into account the previous seven years' chargeable gifts and transfers).

Deadline for paying Inheritance Tax

In most cases, Inheritance Tax must be paid within six months from the end of the month in which the death occurs, otherwise interest is charged on the amount owing.

Tax on some assets, including land and buildings, can be deferred and paid in instalments over 10 years.

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For further details please email: pt@talfourds.com
                                           or info@talfourds.com

Consult Talfourds Solicitors to find Inheritance Tax planning solutions for your requirements
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