Want to save tax this year? Read this week’s short Tax Tip, tailored for UK doctors and dentists to help you save money and get more organised with your tax affairs. Take 5 minutes to have a read.
This article does not constitute advice. Professional advice should be taken prior to acting on any part of it. The Financial Conduct Authority does not regulate tax advice.
Finding the right balance
In general, the most tax-efficient solutions for IHT mean you have the least access to your wealth.
It is therefore a case of making careful decisions along the way to ensure you are meeting your overall financial goals.
How is IHT calculated?
Broadly speaking, IHT is calculated at 40% (current rate) on the total value of all your assets, less the “nil rate band” of £325,000 (17/18).
The value of your assets include property, possessions, money, investment and life insurance policies, not written into trust.
IHT is exempt when:
- your estate is left to a spouse or civil partner, with their permanent home in the UK
- gifts are made to your spouse or civil partner in your lifetime, terms do apply
- gifts are made to charities in your lifetime, or in your Will
- gifts are made to your loved ones, where you survive seven years following, known as potentially exempt transfers (PETs)
- gifts are made up to the value of £3,000 per year, either as one sum or as a combination (unused allowances from previous year count too)
- gifts are made up to the value of £250, as many as you like within your lifetime
- gifts are made to someone getting married or entering a civil partnership – terms do apply.
Inheritance Tax Factsheets
Download our IHT Factsheets here. Just one click:
Need further advice?
Specialist accountant, Michael Lansdell, can answer any tax questions you may have regarding Inheritance Tax planning.