We pay tax on our income, we pay tax on the goods we buy and we pay tax on our savings and investments. We are also potentially subject to tax upon our death.
The Financial Conduct Authority does not regulate on Estate Planning.
Inheritance tax is a tax on your estate. Your estate includes the total of everything you own and a share of anything you own jointly e.g your home.
Items that could form part of your estate include:
Payment from a pension plan
Cars, art, jewellery, furniture and other chattels
For the 2015/2016 tax year, no tax is charged on the value of your estate up to £325,000. This is known as the ‘nil rate band’ and everything above this is taxed at 40%. The Royal Institute of Chartered Surveyors (RICS) estimated in October 2015 that the average house price in London had breached £500,000 for the first time. It is likely therefore that most people will have some form of inheritance tax issue, especially as Chancellor George Osborne has announced the nil rate band of £325,000 would be frozen until April 2018.
The table below illustrates how much tax your estate would have to pay depending on the value of your estate:
HOW MUCH OF YOUR ESTATE WOULD GO TO THE TAX MAN IN THE 2015/16 TAX YEAR?
Inheritance tax bill
Less than £ 325,000
There are a number of ways you can reduce a potential inheritance tax bill.
Make an effective Will
Taken advantage of spousal exemptions
Inheritance tax can be a complex area of planning and Keystone Independent has the know-how to help you with this challenging task. We work closely with specialist tax consultants and lawyers that have very in-depth knowledge and years of experience in helping people plan their estates to minimize any tax burden. As with most financial planning, the sooner you begin this process, the simpler it is.
Please note : Tax treatment varies according to individual circumstances and is subject to change.