inheritance tax [IHT]

Inheritance Tax is a tax that is levied on your estate when you die and pass your estate to your beneficiaries. Transfers to your spouse are exempt, and so, for the vast majority of people, IHT is a tax levied on the death of the longest-living spouse.

It is calculated by working out the value of your entire world-wide assets if you are UK domiciled, and then levying tax as follows (for 2006/07):

First £0-285,000 - Nil Rate Band (no Inheritance tax)
Over £285,000 - 40%

i.e. no tax on that part of the estate within the Nil Rate Band
Example - an estate of £385,000 pays £40,000 tax

Your estate includes all of your property, investments, home etc, (wherever in the world they are located), but for practical purposes it does not include business assets such as farms (where you are the owner occupier or tenant), unincorporated businesses, unlisted or AIM listed companies.

We can organise your various assets so that your IHT liability is reduced as much as possible, thus more of your money goes to your beneficiaries on your death.