Inheritance Tax Planning at Marshall Wills and Trusts
Navigating Inheritance Tax Challenges
As property values continue to rise, inheritance tax (IHT) has become a significant concern for many estates. Under current regulations (as of 2020), each individual is entitled to a lifetime allowance of £325,000. Assets exceeding this value—including cash, savings, investments, and property—are subject to a 40% tax on the amount over the threshold at death.
For married couples, the combined allowance doubles to £650,000, with the ability for the surviving spouse to inherit any unused portion of their deceased partner's allowance.
Additional Allowances and Strategies
1- Residence Nil Rate Band (RNRB)
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Individuals may also be eligible for an additional £175,000 each through the RNRB, provided they own and bequeath a residential home to direct descendants such as children or grandchildren.
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This benefit applies only to the primary residence and begins to taper off for estates valued over £2 million, decreasing by £1 for every £2 above the threshold.
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Qualifying for the RNRB can increase an individual’s allowance to £500,000, or £1 million for couples, before IHT becomes due.
2- Annual Gift Allowance
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Another often-overlooked strategy involves the annual gift allowance of £3,000, which can be given tax-free each year, helping to progressively reduce potential IHT liability.
Proactive Lifetime Planning
At Marshall Wills and Trusts, we focus on lifetime planning to mitigate future IHT issues effectively. By utilizing strategies such as strategic gifting and leveraging allowances, we aim to minimise your IHT exposure and preserve more of your estate for your loved ones.
Start Planning Your Legacy Today
Effective IHT planning is crucial for ensuring that your assets are passed on to your heirs as you intend. Contact Marshall Wills and Trusts to discuss how we can tailor an inheritance tax strategy that protects your estate and aligns with your long-term financial goals.
"Secure your legacy with thoughtful inheritance tax planning from Marshall Wills and Trusts—because your life’s work deserves careful preservation."
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