Inheritance Tax

Emulous Accounting works in conjunction with a leading firm of lawyers & estate planning specialists to provide a complete estate planning service.

The service in conjunction with our partner lawyers covers the legal, tax as well as the accounting aspects involved in estate planning under one roof. Due to this relationship Emulous Accounting can often offer services at what many would consider an extremely reasonable price.

Why is Inheritance tax important?

In the event of your death, your beneficiaries could pay inheritance tax at 40% on the value of your death estate over and above £325,000. If the assets in your estate are worth £600,000 that could mean a tax bill of £110,000. For an estate of £1m the tax figure could be as high as £270,000.

Are there any reliefs or exemptions?

Nil rate band

Every individual whether UK resident or not is entitled to a nil rate tax band of £325,000. If you estate exceeds the nil rate band then tax is generally payable at a rate of 40%.

Spouse nil rate band

In certain circumstances an individual may be able to use there deceased spouse nil rate band in addition to their nil rate band to help reduce their inheritance tax liability. , normally happens when the first spouse to pass away has not used there nil rate band. Normally this happens if the first spouse dies gifting everything they own to their spouse or a charity.

Residential nil rate band

The residential nil rate band was introduced from April 2017. The amount of residential nil rate band will increase every year to April 2021 where it will reach £175,000 per a person. Certain conditions need to be satisfied to obtain the relief such as the house must have been the taxpayers main home at some point and the house must go to a lineal descendant such a child or grandchild.

Annual Exemption

Annual exemption allows a individual to gift £3,000 per a annum to anyone they wish without a IHT liability on that amount.

Marriage exemption

Marriage exemption allows individuals to make gifts to people on there marriage subject to a limit of £5,000 for parents £2,500 for grandparents and £1,000 for any other individual.

For more detailed information and to arrange a free consultation, please contact us.

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