Important things to get your head around
Inheritance tax thresholds
The current threshold for paying inheritance tax is £325,000. However, if you’re giving your home away to children or grandchildren, you may qualify for the residence nil-rate band. That means your threshold increases by a further £175,000*. It’s always worth checking with a expert adviser to see if you’re eligible for the residence nil-rate band.
If you’re in a couple, you’ll each get the £325,000 allowance, plus the increased threshold if applicable, so your combined allowance could reach £1,000,000.
*This is intended to increase in line with the Consumer price index from 2021/22 onwards.
Inheritance tax gifting
Giving parts of your estate to people as gifts before you die can help ease the tax bill on their inheritance. But there are some rules you need to abide by. For instance, gifts to your spouse, gifts under £250, donations to qualifying charities and wedding gifts are usually exempt, but there are exceptions. For assets that aren’t exempt, you may need to give your gifts at least 7 years before you die.
For more information on inheritance planning and gifting, take a look at this article we wrote on inheritance tax gifts.
Next Steps
If you’re thinking about inheritance Tax planning, or you’d like to know more, we can have a no obligation conversation to discuss your options. Book an online video appointment today or request a call back to discuss your options.