Inheritance Tax
On death inheritance tax becomes payable, however the first part of the estate is
known as the Nil Rate Band which is currently £300,000. This means that on the first
£300,000 of your estate you do not pay inheritance tax (known as IHT). This tax
free band will rise in tax year:
Subject to certain other tax saving provisions the rest of the estate is charged
at 40%
Most transfers between spouses/partners are exempt from IHT irrespective of value.
Therefore a husband leaving his entire estate of £450,000 to his wife pays no tax.
Example: However, when the widow dies leaving an estate of £450,000 the first £300,000 is tax free (Nil Rate
Band) the remaining £150,000 is charged at 40% this equals an amount payable of £60,000.
Even between couples it is not always the most tax efficient way to leave
everything to your spouse/partner.
For tax planning advice on inheritance tax or any other tax matters complete your
details below and one of our tax planning associates will contact you.
Proceed to Tax Planning Request Form