Estate planning ensures that the financial affairs of the individual or family are dealt with as efficiently as possible and that Inheritance Tax (IHT) is minimised on death.
Odiri Tax Consultants and Accountants advise clients on estate tax planning and the administration of an estate from our office in Peterborough. The services which we offer clients in this area include:
Inheritance tax (IHT) is a tax payable on the value of your estate over the nil-rate band when you die. For this purpose, your estate comprises property, Cash and Investments, businesses, jewellery, works of art, vehicles, household items, e.g. electrical equipment, life assurance proceeds (unless they are written under trust), overseas assets etc.
If the total value of your estate is more than your nil-rate band, then the amount above the nil rate band will usually be liable for tax at a rate of 40%.
For example, let's say your estate is worth £600,000, and you want to leave everything to your children. If your nil rate band is £325,000, your IHT bill will be £110,000– that's 40% of £275,000.
To work out the value of your estate, you:
The nil rate band (NRB), also known as the inheritance tax (IHT) threshold, is the amount up to which an estate has no IHT to pay. You can pass on assets within your nil rate band without any Inheritance Tax being charged. The allowance is currently £325,000 per person, and this amount will remain frozen until April 2026.
The NRB can be transferred between married couples and civil partners when one spouse dies, regardless of how long ago this happened. An individual can have a maximum of two nil rate bands, but these can be transferred from more than one spouse for people who have had several marriages or civil partnerships.
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