Inheritance tax planning and estate planning UK

Treasuring what's yours and ensuring it gets passed to the next generation needs careful planning and expert advice. Tax planning, including inheritance tax planning and estate planning, requires maximising your tax relief to benefit your loved ones and ensure your assets are left in as tax-efficient a manner as possible.

Worried about your inheritance plans? Contact our friendly team of professional accountants in Hertfordshire who can help you make the most of inheritance tax planning, giving you peace of mind about what happens after your death.

What is inheritance tax?

Inheritance tax is the tax on an estate, including property, possessions and money, of someone who has died. If you don't make proper arrangements, a large chunk of tax could be taken by HMRC, leaving less to pass onto your loved ones when you die.

You might not have to pay any inheritance tax – this can depend on your inheritance tax rates and allowances.

If the value of your estate is below £325,000 or you leave anything over the £325,000 threshold to your spouse, civil partner, charity or community amateur sports club, you may not have to pay tax.

If you plan to leave your estate to your children (fostered, adopted or step) or your grandchildren, your threshold for tax-free estate could go up to £500,000.

The standard inheritance tax rate is 40% and is charged on any amount above the £325,000 threshold. That means, for example, that if your estate was worth £750,000 at the time of your death, there would normally be an inheritance tax bill of £170,000 – that's 40% of the £425,000 left after subtracting your £325,000 tax-free threshold.

We can help remove the complexity of inheritance tax! Get in touch with our friendly, professional estate planners who can answer all your inheritance tax questions.

What is estate planning?

Estate planning in the UK involves considering what to do with your estate and possessions after you have passed away. Planning can help put you at ease about what will happen to your estate and how to get the most out of it.

Estate planning can be time-consuming, but our expert advice and guidance can make this straightforward, effective, and simple to understand. We make it easier for family and loved ones to deal with your estate after you've passed, leaving one less thing to worry about during an emotional period.

The benefits of estate planning

Estate planning comes with many benefits and is best prepared as early as possible. Estate planning benefits include:

  • Protecting your finances for the family.
  • Relief in making sure your will is protected.
  • Reducing the amount of inheritance tax your loved ones will have to pay.
  • Considering what is in your estate and what you want to do with it.

Most importantly, estate planning gives you a clear view of your assets, how you want these to be passed on, and the most tax-efficient way to do so.

How to manage your inheritance tax bill

Nobody wants their loved ones to go through the stress of paying a large amount of their estate towards inheritance tax or losing out on money from their estate. There are, fortunately, a few ways to reduce an inheritance tax bill, including:

  • Gifting money to charity in your will.
  • Giving away up to £3,000 a year in gifts (and £6,000 in some years – speak to us for details).
  • Making regular gifts out of excess income.
  • Stashing money away into a pension.

Money in pensions isn't included in calculating your inheritance tax, meaning any money left in your pension can be given tax-free to a loved one once you pass.

How can AKE Accountancy help you with inheritance tax and estate planning

What happens to your estate after you die, can be a difficult subject to discuss and plan for, but our team of accountants can offer a friendly hand in estate planning and inheritance tax guidance. We can assist with techniques to mitigate inheritance tax on family homes and family businesses and help with lifetime transfers and wills.

With our help, you can ensure a smooth transition of your estate to the next generation while minimising tax liabilities − helping you give the most of your estate to who you want. We will offer inheritance tax advice and help with any documents and planning. We can even assist you with writing out your will and explain why it's essential and what should be included in one.

We aim to provide clear advice where technical jargon might otherwise overwhelm and confuse you. Book your free consultation now and chat through your options.

Would you like a free consultation or a fixed quote?

Call us now on 01707 24 77 77

Get in Touch
AKE Accountancy Ask us a question
Complete the form below and we will come back to you ASAP.