Inheritance Tax Planning Bedford

Inheritance tax planning is an essential part of financial planning for many individuals and families. It involves taking steps to ensure that your assets are passed on to your loved ones in the most tax-efficient way possible. UK residents are subject to inheritance tax, which is a tax on the value of your estate when you die. With careful planning, you can reduce or even eliminate this tax liability, leaving more of your hard-earned wealth to your heirs.

What is Inheritance Tax?

Inheritance tax is a tax on the estate (property, money, and possessions) of someone who has died. The tax is calculated on the value of the estate above the inheritance tax threshold, which is currently £325,000 for individuals and £650,000 for married couples or civil partners. The tax rate is 40% on the value of the estate above the threshold.

Understanding Inheritance Tax Planning

Inheritance tax planning involves a variety of strategies to minimize or eliminate the amount of tax that will be owed on your estate. There are many different techniques that can be used, depending on your individual circumstances, and it’s important to work with an experienced professional to develop a plan that’s right for you.

Strategies for Inheritance Tax Planning

There are many different strategies that can be used for inheritance tax planning, including:

• Lifetime gifting: You can give away up to £3,000 per year tax-free, as well as gifts for weddings, birthdays, and other special occasions. You can also make larger gifts, but these may be subject to inheritance tax if you die within seven years of making the gift.
• Trusts: There are many different types of trusts that can be used for inheritance tax planning, including discretionary trusts, interest in possession trusts, and bare trusts. Each type of trust has its own advantages and disadvantages, and it’s important to work with a professional to determine which type of trust is right for you.
• Business relief: If you own a business, you may be able to claim business relief, which can reduce the value of your estate for inheritance tax purposes.
• Agricultural relief: If you own agricultural property, you may be able to claim agricultural relief, which can also reduce the value of your estate for inheritance tax purposes.

Working with an Inheritance Tax Planning Professional

Inheritance tax planning can be complex, and it’s important to work with a professional who has experience in this area. A professional can help you understand your options, develop a plan that’s right for you, and ensure that your plan is legally sound. They can also help you make any necessary changes as your circumstances change over time. Cowley Holmes Accountants, Bedford are here to help you.

For more information see our…

• The basics of inheritance tax helpsheet
• Inheritance tax calculator

Next Step:

Please contact us if you need further advice, have any questions about our services, or would like a free consultation or a fixed quote.