At this stage we should point out how important it is for you to make a will as dying without one (even though you probably don’t intend to die soon) is a really bad thing. This leaves your estate in a kind of limbo called ‘dying intestate’ which means the Government decide who gets your money which in extreme cases can even be them. We don’t know many people that name the Government in their will so don’t leave your estate to them by accident, write a will. We can help you with this and have many years of experience of how to construct a will in the most tax efficient manner to reduce or avoid IHT on death.
IHT is one of the most unpopular taxes yet it is not payable by many people and is often considered an optional tax as it is normally possible to plan for the tax well in advance and either avoid it altogether or take out insurance to pay the tax for your dependents.
IHT is payable if the total value of your estate (all the assets less all the liabilities) exceeds the IHT Allowance, currently £325,000. Tax is paid at 40% (ouch!) on the value above the IHT allowance even though you’ve paid tax on all the income you earned to buy all these assets in the first place.
One important point to note here: if you leave everything to your spouse there is no IHT to pay on your death. If you do not use the IHT allowance then this allowance is normally available to the dependents to use on the second death although it is important to keep clear evidence.