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Posted on: 13 Mar, 17

You’ve worked hard all of your life to get to where you are, and providing for those you care about is important to you. However, just owning your own home and having sufficient capital to provide a reasonable income during your retirement may leave your estate with a sizeable IHT liability.

If you want to have control over what happens to your assets after your death, effective estate planning is essential. After a lifetime of hard work, you want to make sure you protect as much of your wealth as possible and pass it onto the right people.

Exposed to Inheritance Tax

If you do not plan for what happens to your assets when you die, more of your estate than necessary could be exposed to Inheritance Tax (IHT). You want to be sure that the right people will get the right amounts at the right time – and that they are ready to receive potentially large sums.

Currently, IHT is charged at 40% on all that you own over £325,000. Your estate can pass tax-free to your spouse or registered civil partner when you die. This can mean a joint allowance of £650,000.

New property allowance

From 6 April 2017, the Government is introducing a new, additional tax-free allowance for people who own a home. This is called the ‘family home allowance’. It will be gradually phased in and will eventually be worth an additional £175,000 per person. Combined with the £325,000 allowance we each already receive, this means a new allowance for property owners of £500,000 – or £1 million for couples.

However, when you consider the value of your home and possibly other properties (as well as savings and investments), this allowance can soon be used up.

Estate planning possibilities

Estate planning is about more than just tax. It is about making sure the people left behind are financially supported, that your assets are protected and that the tax your estate pays is fair.

From essential estate planning, such as the establishment of Wills and power of attorney, to options such as making the most of exemptions, giving away excess income and creating trusts, there are numerous estate planning possibilities. Everyone has different requirements and motivations – the right solutions for you are the ones that suit your personal circumstances. We can work with you to discover what these are. Our specialist estate planning advice is designed to help you maximise your wealth and minimise IHT.

Download the PDF to see the full document.

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