Managing inheritance and tax matters can significantly impact the value passed on to your loved ones. This category covers key topics such as Business Property Relief, inheritance tax bands, lifetime gifting strategies, discretionary trusts, and property ownership structures like Tenants in Common. It also explains what happens under intestacy rules, helping you make informed decisions to protect your family’s financial future.
“Gifts out of income” are not a loophole; they’re a long‑standing statutory exemption. The rule sits in section 21 of the Inheritance Tax Act 1984. A lifetime gift is immediately exempt (so there’s no seven‑year clock) if, and to the extent that, three tests are met: (1) the gift formed part of the donor’s normal … Read more
The UK government has confirmed that unspent pension funds and death benefits will become subject to Inheritance Tax (IHT) for deaths occurring on or after 6 April 2027. In other words, from that date the value of remaining pension assets when someone dies will generally be counted as part of their estate for IHT purposes. … Read more
Overview of Business Property Relief (BPR) Business Property Relief (BPR) is an inheritance tax relief that reduces the taxable value of qualifying business assets, potentially by 100% or 50%. Currently, many business interests – such as a trading business or unquoted company shares – can qualify for BPR, effectively reducing (or even eliminating) their value … Read more
The rules of intestacy are the those that apply for distributing your assets if you have not made a Will. The rules depend on whether you are married / in a civil partnership or not, and whether you have children. Broadly speaking: For more scenarios, see the graphic below (click to enlarge). The outcome of … Read more
What is a Tenancy in Common? A tenancy in common is a form of co-ownership where each owner holds a distinct share of the property. Unlike a joint tenancy, these shares may be unequal and are treated as separate in law. All tenants in common have an undivided right to possess and use the whole property (just … Read more
Gifts made during your lifetime can sometimes affect the amount of Inheritance Tax that your estate pays on your death. However, with careful use of Potentially Exempt Transfers and various lifetime gift exemptions, you can reduce or eliminate any IHT on those gifts. Below we outline how lifetime gifting works for IHT purposes, including updated … Read more
I outline the basic Inheritance Tax allowance (the nil rate band) and the newer Residence Nil Rate Band below, and update the guidance to reflect recent and upcoming changes in the rules. Nil rate band Inheritance Tax on your assets is charged at the following rates: The nil rate band is currently £325,000 and is … Read more
A common question I get is, ‘how can I avoid paying care home fees’? With fees at around £800 a week for a place in a care home or £1,078 a week for nursing care*, it’s not surprising so many people are so worried about their assets. I’ve already covered the current rules on who … Read more
In the realm of wealth management and estate planning, there exists a nifty tool that can offer remarkable flexibility and control over the distribution of your assets: the discretionary trust. This type of trust is a popular choice in legal planning for individuals in England and Wales who wish to maintain a level of influence … Read more
