Medident Financial Planning
Helping to leave more than just memories

Inheritance Tax used to be thought of as a rich person's tax, but today, principally through the increase in property values, even people of quite modest means could be building up to a potential tax liability.  Inheritance tax thrives on a lack of planning.

You’ve worked hard for your money throughout your life.  So you'll want to pass it on to the right people.  Unfortunately the taxman could have other ideas.  Through inheritance tax HM Revenue and Customs could receive a large amount of your money when you die.  If you do nothing, your heirs could well be the losers.  The good news is it's easy to reduce your liability to inheritance tax, or maybe not even have to pay it at all.  There are some straightforward ways to reduce the burden of inheritance tax, often by simply re-arranging your affairs.

This is where Medident Financial Planning can help. By talking to you about the choices you have, we can help you to leave more of your money to the people you care about.

Here comes the technical bit....

Currently there are two bands of inheritance tax.

The first band is charged at "nil-rate", so no tax is payable.  It's called the nil-rate band.  Everything over the nil-rate band (from £312,000 for the tax year 2008/09) is chargeable to inheritance tax at 40%.  Spouses and civil partners can transfer their nil-rate band allowances so that any part of the nil-rate band that was not used when the first spouse or civil partner died can be transferred to the individual's surviving spouse or civil partner for use on their death.

A potential liability to inheritance tax arises when ownership of any of your assets passes to someone else, either when you die, or while you're alive – for instance, when you give something away.  In this context, "assets" means possessions of all kinds.  One of the main exceptions to this rule is that when you pass assets to a spouse or civil partner there's no inheritance tax to pay.  More often than not, this is what happens, though taking advantage of the 'spouse exemption' doesn't remove the problem of inheritance tax, it may simply delay it until the surviving spouse dies.

It's easy to see how your estate could be liable to inheritance tax.  Add up the value of the assets you own.  That could be your house, car, jewellery, building society deposits, investments, business assets – you may be surprised by the result.

So how can we help?

We can establish exactly what your inheritance tax liability is, and then look at ways to reduce your potential inheritance tax burden.  However, there are a couple of important things you need to know:

• The tax on your estate will be determined by the law at the time of your death, not the law now.  This means it’s vital to keep your plans for inheritance tax as flexible, and up to date, as possible.  The rules will almost certainly change so, wherever possible, you should consider avoiding taking actions that can’t be changed.
• Be realistic with your plans.  Important as it is, don't make tax saving your first priority.  One possible way to not have to pay inheritance tax when you die would be to dispose of your entire estate well in advance.  But that’s not a wise thing to do as we do not know what lies ahead and you may require access to your capital or the income from any investments and could leave you not having enough money left to live on.

Some of the steps we will ask you to consider when you speak to us are:

• Make a will
• Take advantage of some basics
• Reduce your estate while you are alive
• Make provision to pay the tax when you die
• Keep all your arrangements under regular review, up to date and as flexible as possible

Inheritance tax can be a complex area, but we can help you to use all of these simple methods to make sure your estate ends up in the right hands.  All it takes to pass on more of your wealth to the next generation is a little forward planning and some good financial advice from us.

Remember - Today is the best time to think about tomorrow

Enquire about Inheritance Tax Planning....

The Financial Services Authority does not regulate Tax Planning and Inheritance Tax Planning