Inheritance Tax and Planning Your Estate
The government collects approaching £3 billion in Inheritance Tax (IHT) each year. In doing so, it could deprive your loved ones of your hard-earned wealth. Your estate, that’s everything you own, above £325,000 (the Nil Rate Band threshold) is subject to tax at 40%.
£325,000 is not much and that’s before you take into account the value of your car, savings, investments and belongings. So if, for example, as a married or Civil Partnership couple your joint estate is worth £800,000, tax of £60,000 will have to be paid. Working with you, we will help you to take the necessary steps so that you pay as little tax as possible by using the full range of personal exemptions and reliefs that are available.
It’s not just the uncertainties of life, or dying without a Will, or the IHT trap, there are other threats that you and your wealth may face. For instance, the challenges and costs of living longer, the impact of broken marriages and Civil Partnerships, or unmarried relationships and poor relationships with children and step-children can all lead to your preferred beneficiaries receiving less than you would like.
Whatever your age and circumstances, we will help you to establish exactly what you want to happen – and for whom – after your death. Don’t leave it to chance. Start the process now. Without effective estate planning and the right will in place your wealth and family are at risk.
And here's more food for thought. Suppose you lost your mental capacity? What would you do if, as the result of illness, accident or ageing you become incapable of managing your affairs and business?
The Mental Capacity Act 2005 provides ways in which:
• People can plan ahead for a time when they may lack mental capacity.
• Decisions can be made on behalf of people who lack mental capacity.
Although existing Enduring Powers of Attorney (EPA) created before the end of September 2007 remain valid, they only cover your property and affairs. Lasting Powers of Attorney (available since October 2007) provide cover for your personal welfare and medical treatment in addition to cover for your propertyand affairs.
Legally known as an Advance Decision, a Living Will enables you to plan ahead should become so ill or severely incapacitated that you are unable to express your wishes regarding the type of treatment you wish to receive or to refuse. Besides expressing your wishes, you can also nominate the people (normally your closest family or friends) who must be consulted by your medical team in uncertain situations before any decision is made on your behalf about further treatment.
In many cases, a Living Will may be preferable to a personal welfare LPA.
To discuss your own circumstances with us please call our office on 0845 0179 578