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    Inheritance Tax Planning

    Rising house values in South London and Surrey means that inheritance tax liabilities are likely for anyone who owns a home in the area. Inheritance tax (IHT) is a tax paid by your estate, based on the value of all your assets, e.g. money, property, insurance proceeds, personal possessions, at the time of death. In addition it can be charged on certain lifetime gifts you might make depending on when they were made.

    Currently the rate of IHT payable is 40%, on an estate worth more than the current lifetime exemption threshold of £325,000. If you are married or in a civil partnership, this effectively increases to £650,000 because an estate can pass assets to a surviving spouse tax free, and a surviving spouse can use any lifetime exemption threshold which was unused by their spouse or civil partner.

    Above this threshold, the 40% IHT rate can be reduced slightly to an effective rate of 36%, if you elect to leave 10% or more of your net estate to charity. This applies after removing any other IHT exemptions, reliefs and the lifetime exemption.

    Inheritance Tax Planning – not just for the very wealthy

    Traditionally, IHT has been regarded as a tax on the wealthy but today, with many people’s family homes in South London and Surrey valued in excess of this threshold, it is important for the majority of people to consider inheritance tax planning.

    Indeed, because of the tax planning opportunities that exist, inheritance tax is often referred to as a ‘voluntary tax’. Having a will and undertaking inheritance tax planning ensures you have control over who benefits from and how much tax is paid by your estate. It will also ensure you do not leave loved ones with administrative difficulties and maybe having to sell off family assets to pay unexpected tax bills.

    There are plenty of things you can do now to make sure you pass as much of your wealth as possible on to your family and friends, instead of the taxman.

    Our range of inheritance tax planning services include:

    • Preparing a detailed IHT planning report to assess your current IHT exposure and suggesting IHT planning strategies
    • Assisting in implementing lifetime planning
    • Advising on tax effective will provisions
    • Advising on the use of trusts in IHT planning, and the interaction with capital gains tax (CGT)
    • Advising on using insurance based IHT solutions
    • Domicile tax planning

    Cost effective probate services

    In addition we also offer a dedicated probate service for clients in the position of having to administer the estate of a person who passed away intestate.

    Traditionally, probate services, in which the deceased’s net assets are calculated, managed and distributed, are dealt with by a solicitor. This process does however involve calculating the tax position to the date of death and for the period of administration of the estate, and preparing accounts to arrive at the net distributable assets. Although solicitors often rely on tax advisors to complete the tax calculations, the process of applying for grant of probate is usually administered by a solicitor.

    It is however a growing trend for other qualified professionals to complete the accounts, tax calculations, administration of the estate and obtaining grant of probate. This enables the entire process to be dealt with by one professional, thus saving time on a process that can be notoriously long winded, and of course saving costs.

    Obtain probate and take care of your own future tax planning – at the same time RJP offers a combined probate and IHT planning service.

    This means that if you are in the unfortunate position of having to conclude the financial administration associated with a loved one who did not undertake any inheritance tax planning, the same situation should not arise again. It enables you to swiftly complete probate and put measures in place to minimise the amount of inheritance tax your family will be liable to pay.


    60 Day Deadline for CGT Returns and Tax Payments

    If you sell a property and incur capital gains tax on the transaction, you will need to file a tax return and also pay any tax that is due within 60 days of completion, or penalties will arise. Need help with your property taxes? Talk to us.