Inheritance Tax

It comes as a surprise to many people to discover that they are liable for Inheritance Tax.  But the value of your assets can add up, particularly if you own your own home.

In fact figures published in November 2005 show that the amount of inheritance tax taken by the government has doubled since 1997.

Properly drawn up Wills can reduce the inheritance tax payable on your estate.  Under current legislation, if the estate you leave behind is less than £285,000 (the nil-rate band) your beneficiaries will usually not have to pay Inheritance Tax. 

However, your estate pays inheritance tax of 40% on anything above the nil-rate band, subject to exemptions.  Leaving all your assets to your spouse will exempt your estate from inheritance tax.

Your charitable gift can lower the inheritance tax your family has to pay. 

Net Value of your estate             Tax payable                 Remaining value of estate
£295,000                                          £4,000                           £291,000
£350,000                                          £26,000                         £324,000
£500,000                                          £86,000                         £414,000