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Inheritance Tax Planning Services
In 1986 the Finance Act introduced Inheritance Tax (IHT) to replace Capital Transfer Tax . What must be understood is that the IHT is cumulative in the donor’s lifetime, so it remains chargeable for a period of usually 7 years.
IHT is a “voluntary tax “ , but assessment of liability has become complex due to successive pre budget announcements which eventually become law after Royal assent ( usually by August 1st annually). Basically the tax is levied at 40% and is to be paid on the net estate of the deceased, having applied any allowances . Currently there is a married allowance (or civil partnership allowance) which within England and Wales transfers a “nil rate band”. However rules and allowances are subject to change . In October 2007 the spousal allowance became transferable and the situation has become more complicated. Estate transfers are assessed taking into account the allowance if any available from previous marriages,and in addition the value of any assets held in trust or transferred. The net result will show whether any IHT is payable on death.
There are still planning opportunities open to you, which we can discuss at the time of meeting ,which should result in both families and businesses being protected. It is best to plan ahead!