{"id":649,"date":"2018-09-17T06:14:32","date_gmt":"2018-09-17T06:14:32","guid":{"rendered":"http:\/\/finsbury-associates.com\/?p=649"},"modified":"2021-10-05T22:43:42","modified_gmt":"2021-10-05T22:43:42","slug":"inheritance-tax","status":"publish","type":"post","link":"https:\/\/finsbury-associates.com\/inheritance-tax\/","title":{"rendered":"What allowances are available to me to mitigate my 40% inheritance tax bill?"},"content":{"rendered":"\n[et_pb_section fb_built=&#8221;1&#8243; admin_label=&#8221;section&#8221; _builder_version=&#8221;3.22&#8243; _i=&#8221;0&#8243; _address=&#8221;0&#8243;][et_pb_row admin_label=&#8221;row&#8221; _builder_version=&#8221;3.25&#8243; background_size=&#8221;initial&#8221; background_position=&#8221;top_left&#8221; background_repeat=&#8221;repeat&#8221; _i=&#8221;0&#8243; _address=&#8221;0.0&#8243;][et_pb_column type=&#8221;4_4&#8243; _builder_version=&#8221;3.25&#8243; custom_padding=&#8221;|||&#8221; _i=&#8221;0&#8243; _address=&#8221;0.0.0&#8243; custom_padding__hover=&#8221;|||&#8221;][et_pb_text admin_label=&#8221;Text&#8221; _builder_version=&#8221;3.27.4&#8243; background_size=&#8221;initial&#8221; background_position=&#8221;top_left&#8221; background_repeat=&#8221;repeat&#8221; _i=&#8221;0&#8243; _address=&#8221;0.0.0.0&#8243;]<p><span style=\"color: #333333; font-size: 22px;\">Did you know that you are still subject to UK inheritance tax if you are UK domiciled?<\/span><\/p>\n<p>&nbsp;<\/p>\n<h4>You may therefore be wondering?<\/h4>\n<blockquote>\n<h5>Q: What tax free allowances are available to me before the 40% bill\u00a0 comes in?<\/h5>\n<\/blockquote>\n<p><strong>A: There are a few but they can be tapered away or lost if not used!<\/strong><\/p>\n<ul>\n<li>The main allowance each individual has is the Nil Rate Band, which is currently \u00a3325,000.<\/li>\n<li>You also have an unlimited spouse exemption that allows you to pass all assets over \u00a0time and on death, tax free to your spouse (unless you are UK domiciled and your Spouse is not when special conditions apply).<\/li>\n<\/ul>\n<ul>\n<li>You can transfer your unused Nil Rate band on death to your Spouse. Therefore potentially your Spouse will have a tax free allowance of \u00a3650,000 on their death.<\/li>\n<\/ul>\n<h6>Generosity killed the cat\u2026. (I know, it\u2019s curiosity!)<\/h6>\n<p>&#8211; Be careful. Any gifts made in the previous 7 years to anyone apart from your spouse\u00a0is likely to use up some of this allowance.<\/p>\n<blockquote>\n<h5>Q: What about the Residence Nil Rate Band<\/h5>\n<\/blockquote>\n<p><strong>A: This is an additional allowance for Inheritance Tax which came in 6th April 2017:<\/strong><\/p>\n<ul>\n<li>The current allowance is \u00a3125,000 but this will rise to \u00a3175,000 2020\/21.<\/li>\n<li>This allowance can be transferred, even if your spouse died before 6th April 2017 when it was introduced.<\/li>\n<\/ul>\n<blockquote>\n<h5>Q: What are the conditions?<\/h5>\n<\/blockquote>\n<p><strong>A: Firstly it is only available to those who held a \u2018qualifying residential interest\u2019 at some\u00a0\u00a0point. So it may still be available where you are non resident, have downsized or moved\u00a0<\/strong><strong>into care.<\/strong><\/p>\n<p>But the main condition is that the property has to be inherited by direct (lineal) descendants\u00a0such as children or grandchildren together with their spouses.<\/p>\n<h4><\/h4>\n<blockquote>\n<h5>Q: Does this \u00a0include siblings or nieces and nephews?<\/h5>\n<\/blockquote>\n<p><strong>A: No, it doesn\u2019t, so if you have no children then sadly you have no allowance<\/strong>.<\/p>\n<p>&nbsp;<\/p>\n<blockquote>\n<h5>Q: Is there any reduction based on the value of my estate?<\/h5>\n<\/blockquote>\n<p><strong>A: Where your estate is valued at more than \u00a32 million, this allowance will be progressively\u00a0reduced by \u00a31 for every \u00a32 that the value of the estate exceeds the (\u00a32mn) threshold.<\/strong><\/p>\n<p>So care needs to be taken if you are leaving everything to your spouse and this takes their assets over \u00a32 million. This can leave both you and your Spouse\u2019s allowance to be tapered away!!<\/p>\n<p>&nbsp;<\/p>\n<blockquote>\n<h5>Q: Are there any other allowances that I might be eligible for?<\/h5>\n<\/blockquote>\n<p><strong>A: There are other allowances available such as a \u00a33,000 annual exemption, small gifts,\u00a0\u00a0marriage allowance and gifts out of excess income allowance, which you should try and\u00a0utilise or they will be lost.<\/strong><\/p>\n<p>&nbsp;<\/p>\n<p>Inheritance Tax planning is important as otherwise your available allowances can be lost and\u00a0your main beneficiary will end up being the HMRC.<\/p>\n<p>Talk to <a href=\"https:\/\/finsbury-associates.com\/contact-us\/\">your Financial Advisor today<\/a> if you want to understand more.<\/p>[\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section]\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":1,"featured_media":668,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"\n\t\t\t\t\n\t\t\t\t<img class=\" wp-image-668\" src=\"http:\/\/finsbury-associates.com\/wp-content\/uploads\/2018\/09\/inheritance-uk-expat-image.jpg\" alt=\"inheritance tax\" width=\"764\" height=\"509\" \/>\n<h3>You know that you are still subject to UK inheritance tax if you are UK domiciled.<\/h3>\n&nbsp;\n<h4>You may therefore be wondering?<\/h4>\n<blockquote>\n<h5>Q: What tax free allowances are available to me before the 40% bill\u00a0 comes in?<\/h5>\n<\/blockquote>\n<strong>A: There are a few but they can be tapered away or lost if not used!<\/strong>\n<ul>\n \t<li>The main allowance each individual has is the Nil Rate Band, which is currently \u00a3325,000.<\/li>\n \t<li>You also have an unlimited spouse exemption that allows you to pass all assets over \u00a0time and on death, tax free to your spouse (unless you are UK domiciled and your Spouse is not when special conditions apply).<\/li>\n<\/ul>\n<ul>\n \t<li>You can transfer your unused Nil Rate band on death to your Spouse. Therefore potentially your Spouse will have a tax free allowance of \u00a3650,000 on their death.<\/li>\n<\/ul>\n<h6>Generosity killed the cat\u2026. (I know, it\u2019s curiosity!)<\/h6>\n- Be careful. Any gifts made in the previous 7 years to anyone apart from your spouse\u00a0is likely to use up some of this allowance.\n<blockquote>\n<h5>Q: What about the Residence Nil Rate Band<\/h5>\n<\/blockquote>\n<strong>A: This is an additional allowance for Inheritance Tax which came in 6th April 2017:<\/strong>\n<ul>\n \t<li>The current allowance is \u00a3125,000 but this will rise to \u00a3175,000 2020\/21.<\/li>\n \t<li>This allowance can be transferred, even if your spouse died before 6th April 2017 when it was introduced.<\/li>\n<\/ul>\n<blockquote>\n<h5>Q: What are the conditions?<\/h5>\n<\/blockquote>\n<strong>A: Firstly it is only available to those who held a \u2018qualifying residential interest\u2019 at some\u00a0\u00a0point. So it may still be available where you are non resident, have downsized or moved\u00a0<\/strong><strong>into care.<\/strong>\n\nBut the main condition is that the property has to be inherited by direct (lineal) descendants\u00a0such as children or grandchildren together with their spouses.\n<h4><\/h4>\n<blockquote>\n<h5>Q: Does this \u00a0include siblings or nieces and nephews?<\/h5>\n<\/blockquote>\n<strong>A: No, it doesn\u2019t, so if you have no children then sadly you have no allowance<\/strong>.\n\n&nbsp;\n<blockquote>\n<h5>Q: Is there any reduction based on the value of my estate?<\/h5>\n<\/blockquote>\n<strong>A: Where your estate is valued at more than \u00a32 million, this allowance will be progressively\u00a0reduced by \u00a31 for every \u00a32 that the value of the estate exceeds the (\u00a32mn) threshold.<\/strong>\n\nSo care needs to be taken if you are leaving everything to your spouse and this takes their assets over \u00a32 million. This can leave both you and your Spouse\u2019s allowance to be tapered away!!\n\n&nbsp;\n<blockquote>\n<h5>Q: Are there any other allowances that I might be eligible for?<\/h5>\n<\/blockquote>\n<strong>A: There are other allowances available such as a \u00a33,000 annual exemption, small gifts,\u00a0\u00a0marriage allowance and gifts out of excess income allowance, which you should try and\u00a0utilise or they will be lost.<\/strong>\n\n&nbsp;\n\nInheritance Tax planning is important as otherwise your available allowances can be lost and\u00a0your main beneficiary will end up being the HMRC.\n\nTalk to <a href=\"http:\/\/finsbury-associates.com\/contact-us\/\">your Financial Advisor today<\/a> if you want to understand more.\t\t\t\t","_et_gb_content_width":"","cybocfi_hide_featured_image":"","footnotes":""},"categories":[61,40,14,57],"tags":[15,22,17,18,19],"_links":{"self":[{"href":"https:\/\/finsbury-associates.com\/wp-json\/wp\/v2\/posts\/649"}],"collection":[{"href":"https:\/\/finsbury-associates.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/finsbury-associates.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/finsbury-associates.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/finsbury-associates.com\/wp-json\/wp\/v2\/comments?post=649"}],"version-history":[{"count":0,"href":"https:\/\/finsbury-associates.com\/wp-json\/wp\/v2\/posts\/649\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/finsbury-associates.com\/wp-json\/wp\/v2\/media\/668"}],"wp:attachment":[{"href":"https:\/\/finsbury-associates.com\/wp-json\/wp\/v2\/media?parent=649"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/finsbury-associates.com\/wp-json\/wp\/v2\/categories?post=649"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/finsbury-associates.com\/wp-json\/wp\/v2\/tags?post=649"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}