Inheritance Tax Planning Services in Norwich, Norfolk
In a 1789 letter to his friend Jean-Baptiste Le Roy, Benjamin Franklin famously wrote that "In this world nothing can be said to be certain, except death and taxes." Unfortunately inheritance tax brings the two together into what Roy Jenkins, former Chancellor of the Exchequer, described as a voluntary tax paid by those who distrust their heirs more than they dislike the Inland Revenue.
In reality, inheritance tax is a levy on providence that takes 40% of every pound left to a family (with some exceptions) once the threshold has been reached. The threshold is less than the cost of a detached home in many parts of the country.
It is possible to minimise the amount of tax liability to be paid by some simple planning, including:
- Making use of the threshold on the first death of husband and wife (or civil partners) to pass money down the generations;
- Making use of Potentially Exempt Transfers (PETs*) to reduce the estate;
- Making gifts within the annual allowance, such as -
- Gifts out of normal income expenditure,
- £3,000 in any one year, per donor,
- Gifts up to £5,000 on consideration of marriage (depending on relationship),
- Unlimited gifts of £250 per individual.
* A PET is a gift made seven years before death. In the event of death within the seven year period, there can be a reduction in the tax due; please ask for details.
We can help you to plan your estate so as to minimise the impact of this "tax on family savings."
It is important to be aware that changes in the Financial Act 2006 make certain types of trust liable to tax. We can advise you on the potential impact on existing arrangements as well as help you set up new arrangements, where necessary.
