Inheritance Tax (IHT) is payable at 40% on an estate above the Nil Rate Band threshold of £325,000 from 6 April 2009.. When calculating the value of an estate we can advise you on the relevance of joint property, lifetime gifts, trust arrangements, life polices, pensions, foreign/off-shore implications and other important matters.
If you have concerns about the amount of inheritance tax that may be payable on your death, or as a result of lifetime transfers, our Private Client team can advise on the best wealth preservation methods for you.
Transferable Nil Rate Band
You may have read about the introduction of the Transferrable Nil Rate Band which was introduced in the Finance Act 2008 after being announced by Alistair Darling in the 2007 Pre-Budget Report.
The Transferrable Nil Rate Band is available between spouses and civil partners and can generally be claimed on the second death. It allows the survivor’s estate to take advantage of the first deceased’s unused Nil Rate Band for Inheritance Tax (IHT).
Each person is entitled to a Nil Rate Band of £325,000 from 6 April 2009.. When a spouse or civil partner leaves their estate to the survivor this is exempt from IHT and therefore the tax free saving was traditionally lost unless lifetime tax planning had been considered. Since late 2007, the survivor’s estate has been able to claim the benefit of the unused Nil Rate Band to offset, which can result in a considerable tax saving.
We can assist you in preparing the necessary documentation to claim the benefit of the Transferrable Nil Rate Band and, where this is likely to be relevant, generally encourage clients to consider collating this paperwork during lifetime when making their will.