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Inheritance Tax Guide
Securing your wealth for future generations
In this guide:
- Inheritance tax: the facts
- Starting your journey
- How to protect inheritance from taxes
At The Private Office, our advice proposition and service delivery is built around the relationships we develop with our clients, and part of that relationship is understanding the positive and negative impact of wealth. Never is this truer than when considering legacy and succession planning.
Please note that the Financial Conduct Authority (FCA) do not regulate cash flow planning, estate planning, tax and trust advice.
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From this guide:
Inheritance tax, or IHT, is the tax levied on assets received by gift or inheritance.
Inheritance tax is a one-off tax paid on the value of an estate (i.e. your assets) over £325,000, the current ‘nil-rate band’. The Net estate, after deducting exemptions, reliefs and nil-rate band is taxed at 40% (or 36%, if 10% or more of your net estate is left to charity).
Example: If your individual estate is valued at £950,000, an individual benefactor would pay an inheritance tax bill of £250,000.
£950,000 – the nil-rate band (£325,000) = £625,000.
40% x £625,000 = £250,000.
The tax must be paid within six months of the end of the month in which the benefactor has died. Your estate includes your business*, ownership or shares, and, if you are a UK domicile, assets you own overseas.
Regardless of your domicile or residence, your estate may be liable to UK IHT on your UK assets. Inheritance tax is regarded as a ‘cumulative tax’ as earlier gifts may be taken into account when assessing how much tax is due. The tax is calculated after all of your outstanding debts are paid, including your mortgage.
*Some business assets and shares may qualify for business relief (see page 12 of the guide for more detail).
Download the full guide to read more.
Our clients speak for us
Meet our expert team
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Dan Alder
Senior Financial Adviser - Chartered Financial Planner, APFS
Dan is a Chartered Financial Planner, working from our Bath office and supporting clients across the South. He empowers clients to make informed and confident decisions about the present, their longer-term futures and helping the next generation.
Grace Whalley
Financial Adviser - Chartered Financial Planner, FPFS
Grace is a Financial Adviser and Fellow of the Personal Finance Society. She takes the heavy lifting off clients shoulders to help them to navigate various financial life stages and allow them to focus on meeting their different objectives in life.
David Dodgson
Partner - Chartered Financial Planner, FPFS
David is an experienced adviser and a Fellow of the Personal Finance Society (PFS), supporting his clients with their financial needs. His primary aim is to help his clients gain an appreciation of what lifestyle their current and future wealth is capable of delivering.