If you are inheritance tax planning in Cheshire and anxious about rising duties, financial advisers are keen to reassure you.
In some cases, over half of people seeking financial advice have expressed some concern that they will be impacted – but according to experts, these fears are usually misplaced.
The truth is that while up to 40% people have cited it as a worry, most people will never pay a penny because inheritance tax only affects 4% of estates; i.e., those at the top end. Moreover, fortunes left to formal spouses or civil partners are exempt from tax, whereas people cohabiting in a ‘common law’ living arrangement are not. A lot of people are still unaware that this rule exists.
Spouses and civil partners also stand to gain on unused allowance. Theoretically, you could be the recipient of £325,000 tax-free, with a further £175,000 on top if the main home is passed on to descendants. If you pass your estate on to your spouse before they too pass it on, then with your allowances included, that could amount to circa £1million of property and estate assets, which could be left to immediate descendants without inheritance tax.
If, however, you go over those thresholds, you will be subject to 40% tax. For people with assets valued at less than £325,000, inheritance tax won’t be an issue. If your house and other assets fall beneath the £500,000 threshold and you’re passing it on, then you won’t be affected.
