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Convenient Wills     The home visit will writing service

Stoke (01782) 639716

or     0800 072 5510

Estate Value

For most home owners the majority of their estate is tied up within their property.  The property may not be as big as the mansion in the picture above but in certain parts of the UK any property will be valued in excess of the Inheritance Tax Nil Rate Band Allowance.

IHT Rates

Inheritance tax is a death duty.  The tax rate is 40% when the size of the estate exceeds the Nil Rate Band threshold.The Nil Rate Band threshold is £325,000 per person (2014-15). It is scheduled to rise to £329,000 for tax year 2015-16.

Reliefs and Exemptions

In addition to the Nil Rate Band allowance, transfers between spouses are IHT exempt.  Additional allowances and exemptions can also apply.

By using the ‘spousal exemption’ and the Nil Rate Band allowance it is possible to achieve significant tax savings. An alternative is to use the Transferable Nil Rate Band allowance where the testator is married - see the column to the right.

Further tax planning is possible by careful choice of the testator’s beneficiaries.

Tax Planning

Most people object to paying Inheritance Tax.

The good news is that with a little forward planning it is possible to significantly reduce or even eradicate any potential inheritance tax liability.  And using your Will can be one of the most effective ways of doing so.

The solution may involve:

• The inclusion of discretionary trusts in the testator’s Will;
• Gifts to charity (which are exempt from inheritance tax).
• Careful choice of beneficiaries (e.g. jumping a generation); and/or
• Severing the tenancy of your jointly-owned property.

The Solution

If you use our home-visit will-writing service we will establish whether you have a potential inheritance tax liability and then discuss your options.

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How to use your Will to reduce Inheritance Tax

Did you know that your Will can:

• potentially save up to £130,000 in tax (if certain criteria apply); and
• potentially increase the size of the inheritance your grandchildren ultimately receive.

Transferable NRB

The Transferable Nil Rate Band allowance was introduced in October 2007.

Potential Claimants

The TNRB Can be claimed by the surviving spouse or civil partner.

How It Works

The TNRB Allowance enables a widow or widower to uplift their [deceased] spouse’s unused NRB allowance.  An example will explain what we mean.

If we assume that ‘hubby’ ‘H’ dies and gives everything to his surviving wife ‘W’ - thus he (‘H’) has not used any of his NRB allowance then when ‘W’ dies she can give away her own NRB allowance of £325,000 and her unused husbands allowance - also £325,000.  So, in effect, W can pass to her children £650,000 exempt of inheritance tax (example based on 2013-14 tax band figures.)

Simplifying Planning

The TNRB Allowance removes the need for complex Nil-Rate-Band (NRB) Discretionary trusts to be included in wheels for married couples or civil partners.  This simplifies their estate planning in many cases.

For unmarried couples, business owners, and where families have concerns regarding future marriages etc the IHT NRB discretionary trust remains as important as before.