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Planning for inheritance tax purposes is often neglected until too late, as passing on your estate feels far away and people find themselves shocked when it exceeds the nil rate band of £325,000.

Estate planning is essential to pass on as much of your wealth as possible to your family, rather than into the government coffers. The number of families in the UK paying inheritance tax has been steadily rising. The total amount of IHT paid in the 2018/19 tax year was £5.4bn. Rising house prices and asset values mean that people have much more to leave to their children than in the past.

The residence nil rate band, dubbed the “family home allowance” is £175,000 of extra allowance per individual. Extra allowance will not apply if the estate is too large, the house too small, or if the property passes to anyone other than children, stepchildren and grandchildren of the deceased, or their spouses / civil partners. Assets passed via a discretionary trust does not therefore qualify, because assets do not pass directly to direct descendants.

As with many aspects of tax planning, the devil is in the detail and failing to take straightforward steps can cost you significantly. Inheritance tax charged at 40% can take a big chunk out of the value of your estate. Setting up trusts, of which there is a wide range available, or using available exemptions are potential options for inheritance tax planning.

Estate planning involves taking into careful consideration your circumstances and objectives and reviewing all of your assets so that any efficiencies can be implemented.

The in-depth knowledge and experience of Perspective (North East) advisers across different financial planning areas means that we can help you achieve financial security for yourselves and your loved ones.

Levels, bases of and reliefs from taxation are subject to change and their value depends on the individual circumstances of the investor.

The Financial Conduct Authority does not regulate taxation and trust advice.


Registered in England and Wales No 04163906. Registered Office: Lancaster House, Ackhurst Business Park, Foxhole Road, Chorley Lancashire PR7 1NY.
Perspective (North East) Ltd is authorised and regulated by the Financial Conduct Authority.
Perspective (North East) Ltd is a subsidiary of Perspective Financial Group Ltd.

Should you have cause to complain, and you are not satisfied with our response to your complaint, you may be able to refer it to the Financial Ombudsman Service, which can be contacted as follows:
The Financial Ombudsman Service Exchange Tower,
London, E14 9SR
Tel: 0800 023 4567 or 0300 123 9 123

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