Will Writing Services
A will is one of the most important legal documents you will ever produce, and is the only way to ensure that your wishes are carried out and your estate is divided in the way that you choose.
Benjamin Franklin once said there were only two certainties in life “death and taxes” and when it comes to Inheritance Tax these two separate things become one.
Currently an individual can leave up to £325,000 tax free everything else over and above this amount will be taxed at 40%. For example Mr Smith has a total estate value of £750,000. His inheritance tax liability will be £170,000.
Inheritance Tax Planning is lifetime planning. It is always advised to seek advice on this sooner rather than later and we can help.
Inheritance Tax, or IHT is payable on everything you own at the time of your death. This includes your house, personal items of jewellery and furniture, savings, cars, life assurance etc.
Your executors or legal personal representatives typically have six months from the end of the month of death to pay any IHT due. The estate can’t pay out to the beneficiaries until this is done. The exception is any property, land or certain types of shares, where the IHT can be paid in instalments. Then your beneficiaries have up to 10 years to pay the tax owing, plus interest. At the time of writing interest is charged at 3% on instalments or late payments. If you pay by instalments you must pay a tenth of the amount of tax owed each year for 10 years.
There are several exemptions that can apply which mean that no tax may be payable on them. If you are married and leave absolutely everything you own in your will to your husband/wife no tax will be due.
Some businesses / farms may qualify for certain reliefs which could see the tax potentially lowered or mitigated all together.
Other exemptions may apply if assets are paid out into trusts or paid to charities or political parties.
From 6 April 2012 if you leave 10 per cent or more of your net estate to a ‘qualifying charity’ your estate may qualify to pay Inheritance Tax at a reduced rate of 36 per cent.
You are also able during your lifetime to either place assets into trusts or have trusts wrapped around assets such as life policies, pension lump sums or death in service benefits. These trusts can help reduce inheritance tax liabilities.