Tax, investments and pension rules can change over time so the information below may not be current. This article was correct at the time of publishing.

How does Inheritance Tax work?

In the 2018/19 tax year a record total of £5.4 billion* was paid in Inheritance Tax. As house prices rise, an increasing number of people in the UK have an Inheritance Tax liability to be paid when they die.

At Four Wealth Management, our Financial Advisers are experienced in Inheritance Tax Planning and making recommendations to reduce or even eliminate any liability over time.

What is Inheritance Tax?

Inheritance Tax is a tax that is owed on the value of your estate when you die.

What is the Inheritance Tax allowance for 2019?

For the 2019/20 tax year, no Inheritance Tax is paid on assets up to £325,000 per person. The allowance can be passed onto a spouse so a married couple could have a combined tax-free allowance of £650,000. Anything over the allowance is taxed at 40%. This assumes that the full allowance has been passed to the surviving spouse.

Learn more about how Four Wealth Management can help reduce your liability with the inheritance tax planning service.

What is the residence nil rate band?

The residence nil rate band was introduced in 2017/18 tax year. This allowance means that if your main residential home is passed onto a direct decedent such as a child, grandchild or step-child it is free of Inheritance Tax up to the allowance. In the 2019/20 tax year this allowance is £150,000 per person. This means that the total potential exemption from Inheritance Tax is £475,000 per person or £950,000 per couple. Restrictions apply, so please ask Four Wealth Management for further information.

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Do I have to pay Inheritance Tax if I’m married?

When you die, if your spouse or civil partner are living in the UK, any assets you leave to them are free from Inheritance Tax.

Who pays Inheritance Tax?

Inheritance Tax is a one-off tax paid on the value of an estate after someone dies. The tax is calculated and paid by the executors of the Will. Funds from the estate are usually used to pay the bill.

At Four Wealth Management, one of our qualified Financial Advisers may recommend that you take out a life insurance policy held in trust to cover the Inheritance Tax bill when you die so that your family do not need to worry about it.

When do you pay Inheritance Tax?

The executors must pay the Inheritance Tax bill within six months of the death. Assets from the estate can be sold to pay the bill. You can pay your Inheritance Tax on things that may take time to sell in equal annual instalments over 10 years however interest will be added.

Start Inheritance Tax Planning today

Contact Four Wealth Management today to arrange a no-obligation financial review with a Financial Adviser to find out if you can reduce any Inheritance Tax liability.

*Gov, UK ‘Inheritance Tax statistics’ 2019.

The levels and bases of taxation and reliefs from taxation can change at any time and are dependent on individual circumstances.

Advice relating to the Will involves the referral to a service that is separate and distinct to those offered by St. James’s Place. Wills and trusts are not regulated by the Financial Conduct Authority.

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If you have any queries or would like to arrange a face to face meeting with an adviser for a no obligation review of your personal finances, simply book a call back using the form below. Alternatively, you can call us on 0117 973 0500.

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