Inheritance tax planning is usually something that we put off but if you die without a will the rules of intestacy will apply to your estate.
Year-end tax planning tip 1 – make a will
You can use the forms available from good stationers but if you have a business these forms will probably not be suitable. Some of your assets may escape inheritance tax and so your estate may be below the tax threshold. If you want help writing a will contact a lawyer or a professional will writer. Wills etc are business specialist will writers based in Guildford, Surrey.
Year-end tax planning tip 2 – annual exemption
Everyone has a £3,000 annual exemption for gifts. You can carry this exemption forward to the next year if it is not used. Any gift within this annual exemption is ignored in the event the donor dies within seven years.
Year-end tax planning tip 3 – regular gifts out of income
You can help your family out by making regular gifts out of your income. The gift must be made out of income and so you must have enough left after the gift to support yourself. This can be a handy way of letting grandparents pay school or nursery fees.
Year-end tax planning tip 4 – IHT band of £650,00 per couple
Now IHT fee bands can be transferred between spouses there is no need to set up some trusts. The assets can be left to the surviving spouse. In fact, it may be beneficial not to use a trust as the tax free band keeps increasing.