Inheritance and tax planning

When it comes to money and assets, planning ahead is the only way to make these work harder for more benefit. This benefit may be realised in your estate for your family and loved ones, or by a charitable cause that’s close to your heart. Our Private Client solicitors in Henley can work with you to catalogue your assets and put protections in place for your lifelong work.

In making a Will for good inheritance and tax planning benefits, you may choose to leave all of your estate to family and friends, or all or a portion of your estate to charity. Something you’ll need to be mindful of when making that decision is of course any advantage you’d like to impart and also the tax that will be incurred by your estate, depending on how much this is. Anything above the £325,000 threshold will be subject to inheritance tax at a rate of 40%, which is a sizeable chunk. This tax rate drops slightly to 36% if you have left at least 10% of your estate to charity.

These tax rates differ if you own any property, and will also vary if there is a surviving spouse or if any direct descendants will be inheriting. If you are leaving behind a property that you used as your main residence, an additional tax-free threshold will apply. This allowance will either be capped at a set rate for descendants, such as children or grandchildren, or can fully be passed on to your surviving spouse so that it doubles the threshold that will apply to their estate. This is known as the ‘main residence’ allowance or the ‘residence nil rate band’. This threshold is going to continue to rise each year until 2020 for properties valued up to £1 million. A number of exemptions may also apply depending on your marital status or your line of work.

The area of inheritance and tax planning is complex and there are a number of variables that could impact on your estate. Speak to our team in Henley about your wishes and what strategy might work best for you. For a Free Initial Assessment or to book an appointment, please get in touch on 01491 411 884

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