Inheritance Tax
Inheritance tax is payable at arate of 40% on the net value of an estate in excess of what is known as the nil rate band.
The nil rate band is currently £325,000 and it has been announced that this remain at this level until 6th April 2014 (subject to any further change in law). The nil rate band not used when an estate passes to a surviving spouse or civil partner may be transferred to surviving party and this will effectively double the nil rate band on death of the surviving partner or spouse.
The value of an estate will be calculated at the date of death and may be increased for certain gifts made within the seven years prior to the date of death.
An estate passing to a surviving spouse or civil partner will not attract Inheritance tax.
Certain assets included in the value of an estate may be excluded from the calculation of the charge.
There are specific rules to determine whether a gift qualifies and specific advice should be taken when considering the gifting of certain assets -notably property.
Inheritance tax planning can be very complex and detailed discussions should be held with advisers in relation to the disposition of an estate prior to death and in relation to establishing of trusts or variations within wills.