Inheritance Tax FAQs
When you’ve spent a lifetime working and saving there inevitably comes a time to pass everything on to the next generation. It’s never the easiest thing to discuss but some of your hard-earned legacy could go straight to the Treasury as tax instead of to the people you wanted to benefit from your estate.
How much Inheritance Tax (IHT) will I have to pay?
You will not have any Inheritance Tax to pay if your estate is worth less than £325,000 (the current individual nil rate band for the tax year 2020/21). This amount includes your home, car, savings and any valuables. There is also a £650,000 nil rate band available providing either spouse or civil partner have full unused nil rate bands.
The standard Inheritance Tax rate is 40%, which is charged on the part of your estate that’s above the threshold. Yet if you plan ahead, there are ways to reduce that tax liability. Our carefully chosen partner Wren Sterling can help. They’re experts on sensible financial planning and can advise on all the ins and outs to make sure more of your money does what you want it to.
Does my spouse or partner automatically get everything?
Your spouse or partner will receive what you leave them in your up to date and valid Will. If you do not have a valid Will, your spouse (including civil partners) may not automatically get everything. Unmarried partners have no automatic legal entitlement to your estate.
What will happen to my house?
When you pass a home to your husband, wife or civil partner when you die, there’s no Inheritance Tax to pay on this. But if you leave it to someone else through your Will, its worth will be part of the total value of the estate. There are separate rules if you give away your home before you die.
Is anything exempt from Inheritance Tax?
You can offset the Inheritance Tax liability by paying into an insurance plan that is designed to meet the anticipated IHT bill. Wren Sterling can help you make informed decisions about passing on your home and other ways of protecting your hard-earned cash. Qualifying members* of The Nottingham’s member rewards loyalty programme have access to a free initial meeting for pensions, investments and protection advice from Wren Sterling.
Wren Sterling have a dedicated team to help with retirement planning and ensure that the choices you make are right for how you expect life to unfold in your later years. Call your local branch to enquire about the options available for appointments.
The Financial Conduct Authority does not regulate taxation and trust advice and will writing.
The levels, bases and reliefs from taxation depend on individual circumstances and may be subject to change. HMRC taxation rates applying for tax year 2020/21.
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