UK Inheritance Tax in 2023

As an experienced Will Writing specialist, the first issue to address is to ensure that you understand the implications of  inheritance tax at 40% on your estate.

Inheritance tax is the tax levied on the transfer of assets upon death, and it is important to take steps to minimise the tax burden.

Threshold

The current threshold for inheritance tax in the UK is £325,000, which is known as the nil-rate band. Any assets above this threshold will be taxed at a rate of 40%. However, there are some exemptions and reliefs available that can reduce the amount of tax payable.

Trusts

The first way to reduce inheritance tax is through the use of trusts. Placing assets in a trust can help to reduce the value of an estate and therefore the amount of tax payable.

There are various types of trusts available, including discretionary trusts and interest in possession trusts, each with its own rules and benefits.

Exemptions

One way to reduce inheritance tax is to make use of annual exemptions. These include gifts of up to £3,000 per tax year, which can be given to individuals tax-free. Additionally, small gifts of up to £250 to any number of people are also exempt.

Update your will

In addition to the above, it’s essential to review your will regularly to ensure that it remains up to date and reflects any changes in your circumstances or the law. It’s important to seek advice from a qualified solicitor who can provide expert guidance and help you to take the necessary steps to minimise your inheritance tax liability.

Conclusion

In conclusion, inheritance tax is a complex area of law that requires expert advice to navigate successfully. As a will writing and tax expert, it is important to ensure that you understand the implications of inheritance tax and take steps to reduce the amount of tax payable. By doing so, you can help to ensure that your assets are passed on to your loved ones and save un necessary Inheritance tax at 40%.