Will you pay inheritance tax on your estate?
The answer is, only if your estate is valued over the inheritance tax thresholds.
The current thresholds vary depending on the circumstances of an individual. For example, if you are single with an estate over £325K (the nil rate band), your estate will pay inheritance tax at 40% on any of your assets over that amount.
Secondly, if you are cohabiting and you own your property as joint tenants, the survivor may have to pay 10% of any inheritance tax if this is due on the property.
If the deceased cohabitant owned the property as a tenant in common, (this means a divisible share), their estate will have to pay inheritance tax if the assets are over £325K if they do not have children and over £500,000 if they do. That is because if you own a property and you leave it to your children, the government gives you an extra £175,000 tax free. This is called the residential nil rate band.
If you are married with children, you can pass £1,000,000 to your children tax free. This comprises of the tax free entitlement of £325,000 of the first one to die and the additional £175,000 which can be transferred to reduce the inheritance tax liability on the survivor’s estate on their death.
Trust Elizabeth Middleton Solicitors for All Your Estate Planning Needs
Elizabeth Middleton Solicitors has assisted many clients with their estate planning needs for over a decade. Our team knows that you are likely visiting our offices at a difficult time in your life. That’s why we provide a relaxed environment where you can comfortably tell us about your needs with peace of mind knowing that you will receive sound, expert legal advice. Many clients ask for ‘Solicitors near me’. We are located at Winnersh Triangle, Wokingham, RG41 5TP. We can also do home visits for Will instructions however there is a charge.
Contact us today so that we can help.