Here in the UK, inheritance tax is payable on a person’s estate if its value is above £325,000. If this threshold is exceeded, inheritance tax (IHT) is charged at 40% and must be paid in accordance with government legislation.
Many people across the country employ the assistance of a professional wealth manager and other financial advisors to mitigate how much their final tax bill will be. This effectively allows individuals to ensure that less of the wealth they have accumulated is received by HMRC, and allows them to leave more provisions for those they leave behind.
One of the tactics some people take to cut their inheritance tax bill down to size is giving gifts. Every person is entitled to give £3,000 in gifts every tax year. Those who do not use their entitlement from one year can carry it forward to the next, allowing them to gift up to £6,000 tax free.
On top of this, people can give civil ceremony and wedding gifts. They may leave up to £1,000 per person, or £2,500 if they are for great-grandchildren or grandchildren. If these gifts are for their children, they can gift as much as £5,000.
At Hartey Wealth Management, our team are experts in forming strategies to mitigate IHT while stile remaining compliant. If you’re concerned about the tax your beneficiaries will pay and are seeking financial advice in Chester or Shropshire, why not get in touch today for advice and support?