Pay less, plan more.
Whether you're thinking about how much your loved ones will receive, how to avoid unnecessary tax, Inheritance Tax planning is essential.
With potential change on the horizon, especially under the current Labour government, now is the time to act. Chris Stone Solicitor & Deputy Head of Wills, Trusts & Probate at Jackson Lees, explains why Inheritance Tax planning is essential.
What Is Inheritance Tax?
Inheritance Tax is a tax on the money, house, and other assets you leave behind.
If your estate exceeds the threshold of £325,000 (or up to £1 million for married couples using the residence nil-rate band), your beneficiaries could face a 40% tax bill.
With smart planning, you can reduce or even eliminate this burden.
How to Use Gifts and Trusts to Reduce Your Tax Bill
Gifting is a simple way to reduce your taxable estate.
You can give away up to £3,000 each tax year tax-free and carry forward unused allowance for one year. Gifts from surplus income may also be exempt, and larger gifts become tax-free if you survive seven years after giving them.
Trusts are also powerful tools for estate planning. By placing assets into a trust, you can put in place controls over their distribution while potentially reducing Inheritance Tax. Trusts like discretionary trusts or interest in possession trusts can help to manage tax liabilities over time.
Spouse Exemptions and the Importance of a Will
Transfers between spouses or civil partners are generally exempt from Inheritance Tax, but without a valid will, your estate may not be distributed as you intend.
A well-drafted will ensures your wishes are respected and can help maximise available allowances.
Why You Should Act Now
With ongoing discussions about tax budget changes and increasing scrutiny from HMRC, the landscape of Inheritance Tax is evolving.
Using an Inheritance Tax calculator, completing the right form, and seeking legal advice can help you stay ahead of any change. You can view the Governments IHT tools and calculators here.
Secure Your Legacy by Planning Smart with Jackson Lees
Inheritance Tax planning isn’t just about saving money, it’s about protecting your legacy. By understanding the rules, using exemptions, and making informed decisions, you can ensure your loved ones benefit fully from what you’ve built.
At Jackson Lees, we’re here to help you navigate the complexities of Inheritance Tax planning with clarity and compassion. Let’s plan you and your family’s future, together. Please give us a call, request a callback or make an enquiry to find out how our team can help.