With the ever increasing value of property many of us now have assets above the £325,000 Inheritance Tax threshold, (which has now been frozen until 2015).

At present the tax is charged at 40% on the amount by which your estate exceeds £325,000.  For example if the value of your estate is £400,000 the Inheritance Tax payable would be £30,000.  Property, personal effects, savings and investments are all included in calculating the value of an estate plus any gifts over £3,000 per year made in the seven year period prior to death.

Any assets passing on to your spouse or civil partner, whether by gift or by Will, are exempt from Inheritance Tax.  Gifts to Charity and Political parties are also exempt.  If you own agricultural or business property then these assets can be fully or partly exempt from Inheritance Tax.

It is now also possible for the unused part of spouse or civil partner’s Inheritance Tax allowance to be transferred to the surviving spouse or civil partner to be used on their subsequent death.  An example of how the new arrangement works can be found in the Quick Reference Guide.

Sensible lifetime giving together with an IHT efficient Will can reduce the amount of Inheritance Tax payable on your death.  Porter Dodson’s Inheritance Tax Planning Team can advise if you would like to plan for the future and safeguard your assets for family and friends.