One of the services that we provide to clients is Will-writing. Our founder, Rhoda Cooper, has completed the STEP Will Preparation Certificate and has been writing Wills since 2016.
We meet with clients regularly to write suitable Wills for them and perhaps their partner or spouse. Because we are also tax specialists, we always consider inheritance tax as part of the advice around your Will. If required we can offer solutions tailored to your situation, and these might be tax savings, or it might be more to do with estate protection.
For inheritance tax, married couples or couples in a civil partnership can potentially have up to £1 million worth of tax allowances. So you can have an estate worth up to £1 million and no inheritance tax would be paid once both of you passed away. However, if your estate exceeds £2 million, those allowances are gradually reduced. Any estate with a value exceeding the inheritance tax allowances would be taxed at 40%.
Effective inheritance tax planning
Although very few people like to pay tax, it can be difficult for couples to undertake inheritance tax planning. This can be because most of the solutions that are suggested involve giving away their assets. Some couples find this incredibly difficult to do, particularly if they have been saving and accumulating their wealth over their lifetimes. Shifting your mindset from saving to spending is very difficult.
However, all may not be lost. Even after death, there may be tax planning or estate planning solutions that could help your family’s situation.
Post death tax planning examples
One of the things that could be changed after someone has passed away is passing wealth onto the grandchildren rather than to the children. Perhaps the children of the deceased are financially established themselves and only passing on more wealth to them would make their own tax positions significantly worse.
Another area we can look into is reviewing the deceased’s Will. In some cases, the Will would not qualify for all of the tax allowances available and therefore we could look at altering the estate to secure the additional tax allowances.
There may also be an opportunity to divert assets into a trust rather than giving assets to the beneficiary directly, this often happens when people are concerned about potential care costs in the future.
I would encourage you to get in touch if a family member has passed away and inheritance tax is likely to be payable as there could be some options to make tax savings.
Please contact us for a free initial consultation and a quote on 0116 216 7681 or email hello@finchtax.com.