Whatever your age or the size of your potential estate Hawsons can advise steps you can take to mitigate your Inheritance Tax (IHT) exposure, through lifetime transfers of assets and tax efficient structuring of wills.
Will writing or reviewing existing wills, for you and your spouse or civil partner, are important aspects of estate planning and we can provide these services to ensure that the distribution of assets in your will is structured in a tax efficient manner.
Business owners should optimise their potential entitlement to Business Property Relief and Agricultural Property Relief, and Hawsons will help you to ensure that you do.
For more complex situations the use of a trust as an IHT shelter may be appropriate to your circumstances, and we can provide tax advice on setting up a trust as well as dealing with the ongoing trust accounting and tax administration.
Estate planning and inheritance tax top ten tips
1. If the value of your assets less your liabilities equals less than the Inheritance Tax Nil Rate Band (currently £325,000) you should not have an Inheritance Tax liability on your death.
2. Make a will
3. If you die without a will the laws of intestacy will apply to your estate and your assets may not go to the people that you had wished them to.
4. If you and your partner are unmarried/not in a civil partnership there is no automatic right on death for your assets to be inherited by your other half.
5. Review your will regularly. Legislation will change over time along with your personal circumstances and your will may be out of date.
6. Use your lifetime exemptions
- Annual Exemption of £3000 per donor per fiscal year
- Small Gifts Exemption of £250 per donee per annum
- Gifts in consideration of marriage or civil partnership
7. Normal Expenditure out of Income does not attract an Inheritance Tax charge.
- Must be habitual
- Must be able to prove that the gift was made out of surplus income and that after the gift the transferor was left with sufficient income to maintain their usual standard of living
8. Gifts made during lifetime to an individual are not immediately chargeable.
Provided the donor survives the gift by seven years the value will be removed from his/her estate.
9. You cannot give an asset away in an attempt to reduce your Inheritance Tax liability and continue to benefit from the asset.
10. Trusts can be a useful Inheritance Tax planning tool and may protect your assets in the future should you need to pay nursing home fees or if there is a divorce in the family.
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To find out more about how one of the leading firms of accountants in Sheffield, Doncaster and Northampton can help you, please contact one of our specialists. We believe in long-term client relationships and understand the importance of meeting to establish that you like us and we like you. This is why we offer all new clients a free initial meeting which will enable you to have a discussion about you and your business issues.
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Benefits of working with Hawsons
Take time to get to know you, your business and your aims
Partner-led service tailored to your specific needs
Responsive and available when needed
Tax planning and advice
A one stop shop of specialist services available as needed
Efficient and effective use of technology
No unexpected bills
Tax Partner, Sheffield
Director of Hawsons Wealth Management Limited, Sheffield