Inheritance tax is a key concern for many people living in Sudbury and throughout Essex when it comes to the administration of their estates. Therefore, Laura Richardson explains some of the exemptions that you may like to consider to benefit your potential beneficiaries in her latest article for Andrew Douglas Wills and Legal Services.
Inheritance Tax is charged at a rate of 40%, and therefore it is well worth investigating whether there are any exemptions that would apply to your Estate in Sudbury and throughout Essex.
What is your total Estate worth?
If your Estate is valued at less than £325,000, it will not be liable for Inheritance Tax in Sudbury and throughout Essex. Furthermore, if you are married or in a civil partnership and your Estate is below the threshold for Inheritance Tax, any unused portion of your threshold can be added to your partner’s threshold when you die. Therefore, this could dramatically reduce the amount of Inheritance Tax that your partner’s Estate would be liable for when they die in Sudbury and throughout Essex.
Who are you leaving your Estate to?
If your Estate is worth more than £325,000 it will not be liable for any Inheritance Tax payment providing that you leave everything over £325,000 to your spouse, civil partner, a registered charity or a community amateur sports group. Alternatively, if you leave your home to your children, stepchildren, foster children, or grandchildren, the threshold at which Inheritance Tax is calculated from can rise to £425,000. If you wish to leave your property in this way, contact Andrew Douglas Wills & Legal Services in order to discuss how this could affect you. Finally, if you leave more than 10% of your Estate to a registered charity, you will be charged Inheritance Tax at a reduced rate of 36%.
Have you served in the armed forces?
If you die in active service, or if your death is accelerated by an injury sustained during active service then your Estate will be exempt from any payment of Inheritance Tax.
Furthermore, if you have received an award for bravery or for gallant service, your Estate will also be exempt from any payment of Inheritance Tax when you die.
Other reliefs and exemptions
Business Relief: This is a more complex relief therefore if your Estate will include any business assets, it is advisable to contact qualified professionals, such as Andrew Douglas Wills and Legal Services, for more information.
Agricultural Relief: If your Estate includes land which is actively being used for Agriculture at the time of your death, then your Executor can apply for an exemption to be applied to those assets.
Tapered scale for Gifts: If your Estate includes gifts that you have made in the 7 years leading up to your death, these are charged on a tapered scale meaning that your Estate may not be required to pay the full 40% rate on some or all of these gifts.
Correctly calculating Inheritance Tax, and planning how to best arrange your assets in order to minimise your Inheritance Tax bill is a complex process which should be accounted for by people living in Sudbury and throughout Essex. If you would like to discuss your personal situation with a specialist, contact Andrew Douglas Wills and Legal Services today. We offer a free initial consultation in the comfort of your own home, and as experienced specialists you can rest assured that your Estate is in safe hands when it come to inheritance tax in Sudbury and throughout Essex.
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